Warburg Pincus and Temasek Leading the Race for SBI General Insurance Stakes

Private equity group Warburg Pincus and Singapore’s Temasek are rumoured to pick up stakes in SBI General Insurance according to people directly involved in the matter. The 26% holding on offer is likely to fetch about Rs. 3,250 Crore, valuing the business at Rs. 12,500 Crore. This would be at a premium to the last round of fund raising in September, 2018 when Axis New Opportunities Fund and PremjiInvest invested Rs. 482 Crore for a 4% stake in SBI General Insurance.

Warburg Pincus and Temasek are likely to acquire a maximum 9.9% each. Ownership over 10% classifies a shareholder as a promoter, which has to stay invested for a minimum period of 5 years. PremjiInvest is likely to add to its stake as well.

Insurance Australia Group (IAG) is selling the 26% stake as part of a regional revamp. The Australian insurer while instructing Goldman Sachs to find a buyer for its stake, exited Indonesia, Thailand, and Vietnam. As per reports, India and Malaysia are next on the agenda. In 2018, IAG said it would sell its Thai and Indonesian operations to the renowned Japanese insurer Tokio Marine Holdings for $390 million.

In December 2016, IAG had showcased interest in raising the stake to 49% over in the next two years. It paid Rs. 542 Crore for its 26% stake in the joint venture, which started in 2010.