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SBI selling 4.5% in SBI Life at 1.4% higher price

Thursday’s offer was for non-retail investors, while both retail and non-retail investors will be allowed to bid on Friday.

, ET Bureau|
Updated: Sep 12, 2019, 10.00 PM IST
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Kolkata: State Bank of India has decided to offload 4.5% in SBI Life Insurance for about Rs 3515 crore, which is 1.4% over the floor price fixed for the offer for sale exercise, sources familiar with the process said.

This exercise will boost the capital position of the country’s largest lender and will help the insurance company to comply with the minimum 25% public shareholding norm.

The two-day offer opened Thursday and has seen non-retail investors bidding aggressively for SBI Life shares, prompting SBI to exercise the option to retain oversubscription up to one crore shares over the 3.5 crore base shares put on offer.

Thursday’s offer was for non-retail investors, while both retail and non-retail investors will be allowed to bid on Friday.

The floor price for the sale was fixed at Rs 770 per share while SBI has received bids for about Rs 781.03 per shares, sources said. The stake sale happened through the designated windows of BSE and National Stock Exchange of India and they saw combined bidding for 85,185,607 shares covering 2.7 times the non-retail base size.

Shares of SBI Life Insurance Company fell 0.86% Thursday to Rs 791.90. The floor price at Rs 770 per share, was a 3.6% discount to September 11 closing price of Rs 798.75.

SBI held 62.10% stake in the life insurance company as on June 2019 while BNP Paribas Cardif holds 5.2%, reduced from 22% earlier. Other institutions hold 25.56%.

Sebi regulation did not consider the sale by BNP Paribas as promoter stake sale. According to rules, minimum public shareholding state can be achieved either through a public issuance on prospectus, or offer for sale through stock exchanges, or alternatively placing the offering for institutional QIP.
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