SBI and jt venture partner to offload 10% in SBI Life: Dinesh Kumar Khara

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In a chat with ET Now, Dinesh Kumar Khara, MD & Group Executive, SBI, says 8% will be offloaded by SBI and 2% by joint venture partner BNP Paribas, Cardiff, in the OFS and IPO

Edited excerpts:

The note on the exchanges mentions that SBI is exploring a possibility to sell 8% of the stake in SBI Life. Can you confirm this and elaborate further?

We are exploring the possibility of offloading 8% of our holding into SBI Life and that process has got initiated obtaining the requisite board approval. That is how it is as of now. And 2% would be offered by the joint venture partner who in SBI Life. They are also offloading 2% in the OFS and the IPO.

How much would be the proceeds that SBI would be able to garner post the stake sale?

Much of it will depend on the prevailing market price at the point of time. A broad estimation could be that last time when we did the sake sale, the valuation of the company was put at around Rs 46,000 crore. This year, we are having a much better year in terms of performance. So we will be working out embedded value post 31st of March 2017. We expect that value should move up considering the fact that the company is doing exceedingly well in the current year.

What is the approximate valuation that has been worked out?

It is a function of the embedded value which will be based upon the 31st of March results, It is too premature for me to really make any kind of guesstimate in this direction.

What feedback are you getting from investors and what kind of time lines are you looking at?

We are getting very encouraging feedback from the potential investors. A lot of people are interested in the SBI Life issue. The timelines of course we will be doing in the next financial year and maybe towards September but much of it will depend upon the stock market which will be prevailing at that time.

Do you have any internal deadline or timeline that you have set to complete this transaction?

No such internal deadline or timeline. But otherwise, in the normal course if the market goes well, we are planning to come out with this issue sometime in September-October.

You also recently approved raising stake in both SBI Cards and GE Capital to 75% and you raised about Rs 1160 crore via the deal. What is the progress on this front and when will the transaction be completed?

Our board has accorded approvals for increasing our stake in SBI Card and GE Card processing company. In case of the frontend company -- which is SBI Card ¬¬¬¬-- it has been decided to increase the stake from 60% to 74% while in case of the backend company, it has been decided to increase the stake from 40% to 74%.

So these shares would be sold by GE. We are awaiting for their decision in this matter and once they decide, then we have to carry out the share purchase agreement and the shareholders agreement. That is how it would be unfolding. These are the broad issues which needs to be done in case of SBI Cards.
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