If the sale goes through, the fund will likely make as much as 111 per cent returns from its investment in SBI Life in two and half years.
CPPIB will sell 20 million shares of SBI Life in a price band of Rs 1,159.05 to Rs 1,220.05 apiece against Wednesday’s closing price of Rs 1219.90. As of June 30, Canada Pension Fund held a 2.86 per cent stake in the company. CPPIB is likely to increase the deal size by 3 million shares in case of oversubscription, according to the term sheet.
An email query sent to CPPIB did not elicit any response. BNP Paribas confirmed it was handling the deal.
CPPIB picked up 2.24 million shares of SBI Life at Rs 700 apiece in September 2017 through an anchor allotment ahead of its initial public offering. Later in March 2019, the Canadian fund bought 20 million shares through the open market at an average price of Rs 577.50 per share when BNP Paribas Cardiff, the foreign partner of SBI Life Insurance, sold 50 million shares to meet the minimum public holding norms.
Last month the US private equity fund CA Emerald Investments, an affiliate of Carlyle Asia Partners sold its entire 1.9 per cent stake in SBI Life Insurance Company worth Rs 2,147 crore at Rs 1130 per share.
SBI Life was incorporated as a joint venture between the State Bank of India (SBI) and BNP Paribas. SBI Life is India’s largest life insurer in the private sector, which went public in 2017.
SBI Life has been consistently rated as one of the top players in India’s life insurance sector based on Annual Premium Equivalent (APE) and New Business Premium (NBP).
