Global investment firm Carlyle Group has acquired a 9 per cent stake in SBI Life Insurance from BNP Paribas Cardif SA for over Rs 4,600 crore.
The life insurer, which is a joint venture between the State Bank of India (SBI) and Cardif, on Friday disclosed that the latter has sold 92,252,908 equity shares of the company, of which 90,000,000 shares were acquired by CA Emerald Investments, an affiliated entity of Carlyle Asia Partners V in the open market.
Details available from the Bombay Stock Exchange showed these nine crore shares were acquired by Carlyle at an average price of Rs 515 per share, translating to a consideration of Rs 4,635 crore.
The acquisition price marked a discount of over 11 per cent to the closing price of the SBI Life Insurance scrip on Thursday.
The stake purchase announcement led to the shares of the life insurer gaining on the stock exchanges on Friday. On the BSE, it settled at Rs 612.25, a rise of 5.47 per cent, or Rs 31.75, over the previous close.
SBI Life added that following the transaction, BNP Paribas Cardif and CA Emerald Investments now own 12.77 per cent and 9 per cent of the total issued and paid-up equity share capital of the company, respectively.
The SBI remains the majority shareholder with a 62.1 per cent stake.
“We are pleased to have a long-term investor like Carlyle as a shareholder of the company. SBI Life operates in some of the most dynamic and attractive life insurance markets. Our business is fully aligned with the fundamental drivers of long-term growth in India — higher urbanisation rate, lower penetration and high protection margin to cover,” Sangramjit Sarangi, chief financial officer of SBI Life, said while commenting on the transaction.
He added that SBI Life’s strong distribution capabilities, financial strength and customer-first approach has placed it in a unique position to help safeguard the financial security of the customers in the country.
Carlyle has invested in the financial services industry in Asia Pacific over the past two decades, investing more than $4 billion in equity in more than 15 private equity investments as of December 31, 2018. In India, its recent investments include PNB Housing Finance and SBI Card.
SBI Life had clocked a 14.7 per cent growth in its profit after tax at Rs 264.28 crore for the third quarter ended December 2018. Its PAT stood at Rs 230 crore during the same period of the previous fiscal. The total income of the private insurer rose to Rs 12,156.39 crore against Rs 9,585.87 crore in the third quarter of the previous year.
