After listing its life insurance vertical in October 2017, State Bank of India (SBI) is now preparing to launch an initial public offering (IPO) for its general insurance business.

Pushan Mahapatra, managing director and chief executive officer, told CNBC-TV18 that the IPO would require 12-15 months of ground work and the company is on track to launch the issue by FY20.

The book value of the company stands at Rs 1,600 crore, according to Mahapatra.

When asked about the valuation, he drew parallel between the valuations of SBI General Insurance to that of ICICI Lombard, which also got listed last year and is trading at a price/book value of over nine times.

However, Mahapatra said that foreign partner Insurance Australia Group (IAG) has expressed its intention to increase its stake in the joint venture.

Currently, SBI owns 74 percent and Insurance Australia Group (IAG) owns 26 percent stake in SBI General Insurance.

Speaking on Supreme Court’s order mandating general insurers to provide long term third party policies for vehicles, Mahapatra said the company has to issue a mandatory three year motor third party policy for four-wheelers and a mandatory five year motor third party policy for two-wheelers starting September 1.

He added that the contours of these new kind of products are currently being discussed at the General Insurance Council.

First Published:Aug 2, 2018 2:28 PM IST