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SBI Life Insurance Company's Rs. 8,400 crore of $1.3 billion initial public offer (IPO), the biggest insurance IPO in India, opened for subscription today. SBI Life's IPO, also the biggest in India in last 7 years after Coal India, will give a valuation of Rs. 70,000 crore to the life insurer backed by India's biggest lender SBI and BNP Paribas Cardif. SBI owns 70 percent equity while BNP Paribas Cardif 26 percent in SBI Life. Priced in a band of Rs. 685 to Rs. 700, SBI Life IPO can be subscribed in lot sizes of 21 shares, which means one has to shell out minimum Rs. 14,385 (at Rs. 685/share) to apply the IPO. The IPO will close on Friday (September 22). SBI Life has already raised Rs. 2,226 crore from anchor investors. At the end of Day 2, SBI Life Insurance Life has subscribed 58 percent.
Here are 10 things to know about SBI Life Insurance IPO:
1) SBI Life does not intend to raise any fresh capital through this offer. This IPO is purely an offer for sale by both the promoters where SBI is selling 8 crore shares and BNP Paribas Cardif is selling 4 crore shares. Post this IPO, promoter's holding in SBI Life Insurance will come down to 84 percent from 96 percent now.
2) SBI Life Insurance company is the largest private life insurer in India in terms of new business premium generated with 20 percent market share followed by HDFC Life and ICICI Prudential, who held 17.2 percent and 15.5 per cent shares respectively in FY2017. SBI has been maintaining this leadership position since 2010, says Angel Broking quoting a Crisil report.
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