SBI General Insurance reported profit in 2016-17 and the company will wait for a year or so before going for IPO.
New Delhi: State Bank of India has said it may look at taking the general insurance business public next fiscal, ruling out any such move in 2017-18.
SBI General Insurance is a joint venture between SBI and Insurance Australia Group. While SBI holds 74 per cent stake in the JV, the rest is with IAG. "It has reported profit in 2016-17 and we will wait for a year or so before going for IPO," SBI Managing Director (associates and subsidiaries) Dinesh Kumar Khara told PTI.
He said however that SBI Life Insurance will go in for the initial public offer (IPO), wherein SBI and its foreign partner Cardif together offload 12 per cent stake, within a few months. SBI proposes to sell 8 per cent, while Cardif of France, 4 per cent.
On SBI General Insurance, Khara said the company has achieved break-even in 2016-17, the 6th full year of operations, and recorded a profit of Rs 153 crore as against the loss of Rs 120 crore in 2015-16. Its gross written premium rose by 27 per cent to Rs 2,607 crore in 2016-17, as compared to Rs 2,041 crore in the previous fiscal.
Khara said SBI Life Insurance will soon file the Draft Red Herring Prospectus (DHRP), but did not provide the timeline.
At the end of March 31, 2016, SBI Life had an embedded value - present value of future profit - of Rs 13,000 crore. Solvency ratio was 2.04 as against the regulatory mandate of 1.5. It had lowest operating expense in the industry of 7.8 per cent, down from 9.2 per cent a year ago.
SBI Life is a joint venture between SBI, the country's largest lender, and BNP Paribas Cardif. SBI owns 70.1 per cent in the insurer, Cardif - 26 per cent, and KKR and Temasek the remaining stake.