Six Private Equity Funds Shortlisted for Picking 26% in SBI General Insurance

The joint venture formed between State Bank of India and IAG in the year 2010 is in news again. At the time of the 74:26 partnership, IAG paid Rs. 542 Crore for its 26% stake, however, the latter is now looking to exiting its holding to the insurer. The names of six private equity funds including PremjiInvest, ChrysCapital, Carlyle, and GIC of Singapore have come up in the list of those selected for picking up a 26% stake in SBI General Insurance. The 26% stake is said to cost the acquirer about Rs. 3,000 Crore.

The stake sale by Insurance Australia Group (IAG) are said to value SBI General Insurance at Rs. 12,000 Crore. According to close sources, Goldman Sachs is running the process and the deal is in the final stages and to be announced in a couple of weeks, after which the stakeholders concerned will go to the insurance regulator for approvals.

The private equity investors may team up with one another and create groups to buy the 26% IAG stake. There are chances of GIC of Singapore of tieing up with ChrysCapital for the deal and ChrysCapital of joining hands with other PEs to bid for businesses.

The Insurance Australia Group is in the process of restructuring its Asia-Pacific operations. The insurer has already exited Indonesia, Thailand, and Vietnam and focusing on businesses in New Zealand and Australia.