Canada Pension Board to sell 2% in SBI Life

Canada Pension Board to sell 2% in SBI Life

Shares of SBI Life Insurance Company tank 4% following the reported stake sale by Canada Pension Plan Investment Board (CPPIB).
CPPIB is set to sell a 2% stake in SBI Life Insurance Company worth Rs 2,274 crore through the stock exchange platform on Thursday, according to a term sheet issued by the sole book-runner of the deal BNP Paribas.
If the sale goes through, the fund will likely make as much as 111% 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% 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.
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% stake in SBI Life Insurance Company worth Rs 2,147 crore at Rs 1130 per share.

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