SBI Life plans to go public in 2009

SBI Life Insurance, the country’s leading life insurer, plans to hit the capital market by March 2009. The company has recently started a valuation exercise internally for its equity raising plan. It may later appoint an external agency to carry out the valuation. “We are now eligible for going public as we booked profits for two consecutive years. The company is also doing business for around 10 years,” SBI Life managing director US Roy said here on Thursday. However, a couple of issues are still bothering the management. First, the statutory requirement is not very clear for insurance companies planning to launch an IPO. Secondly, the Reserve Bank of India is yet to spell out the holding company rule. “Although we are getting ready with our IPO, we are waiting for RBI to come out with the holding company norms. There is no clarity yet on the holding company issue,” Mr Roy said. On appointment of an external valuer, Mr Roy hinted that a decision would be taken after the completion of the internal valuation. Meanwhile, the promoters of the insurer — State Bank of India (SBI) and Cardiff of France — plan to inject fresh capital of Rs 200-250 crore by March 2008 to support its business growth. Currently its paid-up capital stands at Rs 600 crore. It started operations with an authorised capital is Rs 1,000 crore. SBI and Cardiff will invest capital in the proportion of their respective holding in SBI Life. SBI holds 74% in the insurance company, while Cardiff holds the balance 26%. Mr Roy said the company may record over 100% growth for the fiscal. He expects the company’s total premium income to touch Rs 7,000 crore for 2007-08, compared to Rs 2,900 crore in the preceding fiscal. – www.economicstimes.com