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SBI to divest stake in life biz PNB MetLife's listing plans

The State Bank of India (SBI) has PNB MetLife could be valued at over Rs. 8,000 crores and would be the 4th life
started the process for selling some insurance company to list on stock exchanges as
of its investments which are not criti- the company looks to raise funds. ICICI Pruden-
cal to its core business in an attempt tial was the first insurer to be publicly listed in
to shore up its capital base. SBI has September 2016. SBI Life and HDFC Life are in
stakes in stock exchanges, deposito- the process of listing by December 2017.
ries, clearing and warehousing corpo-
rations, and credit rating agencies. "The Board looks at all opportunities to add
value to the business and an initial public offer-
In the past, SBI executives have said ing is clearly one option," said a PNB MetLife spokesperson in response to the
that monetizing non-core assets was query. "We can confirm that the board has agreed to explore an IPO but it is
one possible way of raising capital. too early to make any further statements at this time." There was no response
This is in line with the government's on the likely embedded value of the company by the spokesperson.
thinking that banks should sell non-
core investments to improve capital The company has assets under management of Rs 16,000 crores. It had re-
adequacy ratio. ported profit after tax of Rs 103 crores in the last financial year up from Rs 63
crores in the previous year.
Birla Sun Life, Max Life
Punjab National Bank BSE 2.35 % had bought the stake in MetLife in 2013 with
exploring possibility of a 5-year lock-in period. The insurer is present in 7,000 locations, including

merger through branches of Punjab National Bank. It is the second largest life insur-
ance firm promoted by a state-run bank, after State Bank of India-led SBI Life.
Analjit Singh controlled Max Financial
Services is in talks with Aditya Birla
Group to explore possibility of merger ICICI Bank, Prudential said to weigh sale of 6% stake in
of their life insurance businesses. If ICICI Prudential Life
the merger takes place the new entity
will jump to the position of top 3 pri- ICICI Prudential Life Insurance Co.'s two biggest shareholders are weighing a
vate life insurers in the country. sale of about a 6% stake in the Indian insurer,
according to people with knowledge of the
These negotiations are still at an matter. Prudential Plc and ICICI Bank Ltd. are
early stage and the parties are ex- considering a possible deal to pare their stakes
amining the regulatory contours. as soon as in the next few months. Sharehold-
Recently HDFC Standard Life Insur-
ance Co. Ltd and Max Life Insurance ers may decide to cut their stakes through
Co. Ltd called off their proposed multiple transactions.
merger end July, failing to win regu- ICICI Bank currently owns 54.9% of the insurer, while Prudential has a 25.8%
latory approval for a merger that stake, exchange filings show. The shareholders plan to sell stock to help the
would have created an insurance company meet the minimum public float requirement after listing, according
giant with Rs1.1 trillion in assets. to the insurer's 2016 IPO prospectus.

Life Insurance Today October 2017 39

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