Kolkata: The country's largest public sector lender, State Bank of India, is planning to inject fresh capital into its insurance arm, SBI Life, which is awaiting the right market conditions to raise funds through an initial public offering (IPO).
The company's MD & CEO Uday Sankar Roy, however, denied to reveal the amount SBI Life Insurance intended to bring in as fresh capital. "It is difficult to say now. It will all depend upon the business requirement," he said. Commenting on the IPO, he said: "We are progressing on the IPO. But, in the current market scenario,it is difficult to say at this point of time when it will hit the market." SBI chairman O P Bhat had earlier said SBI Life Insurance, in which the banking major has a majority 76% stake,would hit the capital market by the end of 2009.
BNP Paribas Assurance holds the remaining 24% stake in the life insurance venture.
Apart from the volatility of the capital market, the company's IPO might wait for few issues to be settled, including some impending regulatory changes domestically, such as increasing higher foreign direct investment. The government has tabled the Insurance Bill in Parliament aiming to increase the FDI cap in the sector to 49% from 26% now.
"As on September end, our solvency ratio is 2.6% as compared with the regulatory requirement of just 1.5%," Roy said. SBI Life Insurance has a paid-up capital of Rs 1,000 crore, while the authorised capital is Rs 2,000 crore. The company's market share rose to 14% in the first seven months of the current fiscal against 12% at the end of the last financial year.
Meanwhile, Roy expects the new business premium income from the last quarter could grow by 30% compared to the corresponding quarter of the last fiscal. AGENCIES
The company's MD & CEO Uday Sankar Roy, however, denied to reveal the amount SBI Life Insurance intended to bring in as fresh capital. "It is difficult to say now. It will all depend upon the business requirement," he said. Commenting on the IPO, he said: "We are progressing on the IPO. But, in the current market scenario,it is difficult to say at this point of time when it will hit the market." SBI chairman O P Bhat had earlier said SBI Life Insurance, in which the banking major has a majority 76% stake,would hit the capital market by the end of 2009.
BNP Paribas Assurance holds the remaining 24% stake in the life insurance venture.
Apart from the volatility of the capital market, the company's IPO might wait for few issues to be settled, including some impending regulatory changes domestically, such as increasing higher foreign direct investment. The government has tabled the Insurance Bill in Parliament aiming to increase the FDI cap in the sector to 49% from 26% now.
"As on September end, our solvency ratio is 2.6% as compared with the regulatory requirement of just 1.5%," Roy said. SBI Life Insurance has a paid-up capital of Rs 1,000 crore, while the authorised capital is Rs 2,000 crore. The company's market share rose to 14% in the first seven months of the current fiscal against 12% at the end of the last financial year.
Meanwhile, Roy expects the new business premium income from the last quarter could grow by 30% compared to the corresponding quarter of the last fiscal. AGENCIES
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