India's largest public lender the State Bank of India (SBI) on Wednesday approved the sale of 4 percent equity in SBI General Insurance to Axis AMC and Pl Opportunities Fund (Premji) for Rs. 481.73 crore.

"The Executive Committee of Central Board (ECCB) in its meeting held today has inter alia accorded approval for divestment of 86,20,000 equity shares constituting 4 percent stake in SBI General lnsurance Company Ltd. at a total consideration of Rs. 481.73 crore to M/s Axis New Opportunities AIF-l (Axis AMC Ltd.) and Pl Opportunities FundI (Premji) subject to all regulatory approvals," the bank said in an exchange filing.

SBI has to get Insurance Regulatory and Development Authority's (IRDA) nod to sell the stake in its insurance arm.

The sale process, which was announced by SBI in August, is being managed by Kotak Investment Banking.

The stake sale is part of the pre-offer valuation exercise of SBI General Insurance before its planned initial public offering (IPO) by the end of March this year, the report said.

SBI chairman Rajnish Kumar on Wednesday confirmed the lender is looking at selling stakes in some of its subsidiaries including General Insurance over the next two years.

“All our subsidiaries have done exceedingly well. They hold large value which is waiting to be unlocked. We have plans to unlock that potential in the current as well as in the next year,” Kumar said.

Apart from General Insurance, the bank is also planning to sell its stake in SBI Card and SBI Capital Market, he said.

The proposed stake sale in SBI General Insurance has drawn interest from at least three global private equity investors, including KKR, Singapore’s Temasek Holdings Pvt. Ltd and Canada Pension Plan Investment Board (CPPIB), reported Mint.

SBI General Insurance is a 74:26 joint venture between the SBI and Insurance Australia Group (IAG), which paid ₹ 542 crore for a 26 percent stake in the joint venture.

First Published:Sept 26, 2018 3:20 PM IST