State Bank of India's board on Wednesday approved sale of a 4 per cent stake in subsidiary SBI General Insurance Company for Rs 482 crore. SBI said, after an executive committee meeting of its board on Wednesday, that 86.2 lakh shares would be sold to Axis New Opportunities AIF-I and PI Opportunities Fund-I, it said in a statement. The funds Axis New Opportunities AIF - I and PI Opportunities Fund - I, managed by Axis Bank and Premji Invest respectively, will purchase stakes of 1.65 per cent and 2.35 per cent stake from the bank, it added.
The country's largest bank said the proposed transaction, subject to regulatory approvals, values SBI General Insurance at over Rs 12,000 crore. After the transaction, SBI will hold a 70 per cent stake in SBI GI while its joint venture partner, IAG International Pty Ltd, will continue to hold 26 per cent.
"SBI happily welcomes Axis New Opportunities AIF and Premji Invest as our incoming partners in SBI GI. Insurance segment is still young and nascent in India, it is a highly under penetrated market, we foresee a significant scope of growth for SBI GI to achieve size, scale and profitability. We shall continue to extend our support and are excited about SBI GI's bright journey ahead," said Rajnish Kumar, chairman, SBI.
SBI General Insurance Company is a joint venture between State Bank of India and IAG International Pty Ltd (IAG).
State Bank of India shares closed 2.9 per cent lower at Rs 263 apiece on the NSE, ahead of the announcement of divestment.