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LIC reduces 2.14% stake in Tata Global Beverages, sells 1.35 crore shares
18-Jul-2017 15:42

Life Insurance Corporation (LIC) has reduced its stake in Tata Global Beverages by 2.14 per cent, selling 1.35 crore shares in the market.

The public sector insurer, which had 9.85 per cent stake earlier, brought down its shareholding in the company to 7.70 per cent by selling shares between July 20, 2016, and July 4, 2017, Tata Global Beverages (TGBL) said in a filing to BSE.

TGBL's tea brand includes Tata Tea, Tetley, Good Earth Teas, Vitax, teapigs and JEMCA.

It is the world's second-largest manufacturer and distributor of tea with significant brand presence in over 40 countries across Asia, Europe, North America, the Middle East, Africa and Australia.
SBI Life Insurance files DRHP for IPO to raise Rs 7,000 crore
18-Jul-2017 09:39

SBI Life Insurance, a joint venture (JV) between the State Bank of India (SBI) and BNP Paribas Cardif, filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi), the capital markets regulator, for an initial public offering (IPO) of equity shares, on Monday.

The two JV partners are planning to sell up to 120 million shares of a face value Rs 10 each through an offer for sale, which will help them garner well over $1 billion (about Rs 7,000 crore).

The SBI, the country's largest bank, is selling up to an 8 per cent stake, or 80 million shares, in the unit as part of the IPO. BNP Paribas group is selling up to 4 per cent (40 million shares).

According to the offer document, the SBI holds 70.1 per cent and BNP Paribas 26 per cent in the life insurance company. Value Line Pte. Ltd, an affiliate of KKR Asian Fund L.P., and MacRitchie Investments Pte. Ltd., an indirect wholly owned subsidiary of Temasek Holdings (Private) Ltd, hold a 1.95 per cent stake each in SBI Life, which they had purchased in around December 2016 for Rs 1,794 crore, valuing SBI Life at Rs 46,000 crore.

On December 9, 2016, the SBI informed the Bombay Stock Exchange that the Executive Committee of the Central Board (ECCB) of the bank had approved divesting 39 million equity shares, constituting 3.9 per cent in SBI Life Insurance Company, at Rs 460 per share, subject to regulatory approvals.

However, since then, market valuations have changed. For instance, on December 9, 2016, ICICI Prudential LifeÆs market capitalisation was pegged at about Rs 42,500 crore.

Its share price has since risen 61 per cent and market capitalisation stood at Rs 68,000 crore at Monday's close. Extrapolating from this, SBI Life could be now worth about Rs 74,000 crore. Consequently, a 12 per cent stake sale through an offer for sale by the two major stakeholders could fetch them more than Rs 8,800 crore or $1.38 billion.

The prospectus filed with Sebi did not mention how much the IPO would raise. But investment bankers had previously confirmed it would likely raise more than $1 billion. This being an offer for sale by promoters and since no new shares are being issued, the proceeds of the IPO will not go to the life insurance company but to the promoters.

The process of listing is expected to be completed before December. The proceeds would help the SBI to bolster its capital adequacy ratio (CAR) to meet regulatory norms and support business growth, bankers said.

Axis Capital, BNP Paribas, Citi, Deutsche Bank, ICICI Securities, JM Financial, Kotak Investment Banking, and SBI Capital Markets are managing the issue.

SBI Life will be the second life insurer to go public after ICICI Prudential Life Insurance.

SBI Life, in a statement, said its embedded value was Rs 16,537.9 crore as of March 31, 2017, based on the Embedded Value Report issued by the independent actuary. Its profit after tax increased from Rs 814.8 crore in FY15 to Rs 954.6 crore in FY17.
HDFC Standard Life Insurance to launch IPO; puts merger with Max Life on hold
18-Jul-2017 09:32

HDFC Standard Life today decided to come out with an IPO and put on hold its proposed merger with Max Life in absence of regulatory approval.

The board of HDFC Standard Life Insurance in its meeting held on July 17 has approved an enabling resolution for an initial public offer (IPO) by way of offer for sale by the HDFC and Standard Life in the ratio as mutually agreed amongst them up to a maximum of 20 per cent of the paid up capital, the insurer said in regulatory filing on stock exchanges. Paid up share capital of the insurance firm was Rs 2,190 crore at the end of March 2017.

"The IPO is subject to relevant regulatory and other necessary approvals, as applicable/ required, including that of the Insurance Regulatory and Development Authority of India," it said.

Embedded Value of HDFC Life rose to Rs 12,390 crore as on March 31, 2017 as against Rs 10,230 crore. Assets Under Management increased by 24 per cent to Rs 91,740 crore. With reference to earlier announcement of a proposed merger between HDFC Life and Max Life, it said, "We continue to believe that such a transaction if it can obtain the necessary approvals would create strategic value for both the companies." In August 2016, the board of mortgage lender HDFC had approved merger of Max Life and Max Financial Services with its insurance arm HDFC Standard Life Insurance Company.

Last month, Max India exuded confidence on proposed merger saying both the parties were committed and "evaluating various options" post Irdai's denial last November to scheme because of the complex nature of merging an insurance business with a financial entity. At present time, it said, no structure prior to an IPO of HDFC Life has been identified which satisfies shareholders' requirement. "If Max Life and ourselves are able to obtain all the necessary regulatory approvals, HDFC Life Board and its promoters would be willing to re-evaluate the option of merger with Max Life in due course," it said.

As per the original plan, Max India was supposed to amalgamate Max Life Insurance with Max Financial Services. Subsequently, the insurance business of the merged entity was to be demerged so that it could be transferred to HDFC Standard Life Insurance Company.

However, the whole scheme did not go down well with the Insurance Regulatory and Development Authority of India (Irdai) as it was in contravention of the Section 35 of the Insurance Act, 1938 that does not allow merger of an insurance business with a non-insurance.

HDFC Standard Life Insurance (HDFC Life) is a joint venture in the ratio of 61.5:35 between India's biggest mortgage lender HDFC Ltd and UK's Standard Life. Max Financial Services, promoted by USD 2 billion Max Group, is the holding company for Max Life which is a joint venture with Mitsui Sumitomo Insurance Company. Max Financial owns 68 per cent stake in Max Life, while Mitsui Sumitomo owns 26 per cent.
SBI Life, second life insurer to go public, to issue up to Rs 12 crore shares
17-Jul-2017 21:31

SBI Life has filed the IPO documents with Sebi to raise up to Rs 7,000 crore, in which promoters SBI and France's BNP Paribas Cardif (BNPPC) will sell 12 per cent stake of the company.

Individually, SBI will dilute 8 per cent and BNP Paribas Cardif 4 per cent in the join venture company -- SBI Life.

"The life insurer is expected to raise about Rs 6,000- 7,000 crore through this IPO (initial public offer)," according to investment banking sources.

This will make a gross dilution of 120 million (12 crore) equity shares by both the shareholders, according to the draft red herring prospectus (DRHP) filed with Sebi.

"Initial public offer of up to 120,000,000 equity shares of face value of Rs 10 each of SBI Life Insurance Company Ltd for cash at a price aggregating up to ... Through an offer for sale by State Bank of India and BNP Paribas Cardif SA (selling shareholders) of up to 80 million (8 crore) equity shares and up to 40 million (4 crore) equity shares respectively," as per the DRHP document filed by SBI Life.

SBI Life Insurance (SBI Life) is a joint venture between India's largest lender State Bank of India (SBI) and BNP Paribas Cardif-- insurance holding company of France.

At present SBI holds 70.10 per cent in SBI Life and BNPPC 26 per cent. Minority shareholders Value Life Pte, an affiliate of KKR Asian Fund and MacRitchie Investments Pte, a wholly owned subsidiary of Temasek Holdings hold 1.95 per cent each.

Explaining the rationale behind the IPO, SBI Life said the company wants to achieve the benefits of listing equity shares on the stock exchanges.

"The listing of equity shares will enhance the 'SBI Life' brand name and provide liquidity to the existing shareholders. The listing will also provide a public market for equity shares in India.

"Our company will not receive any proceeds from the offer," it added.
IRDAI asks insurers to collect Aadhaar details of insurance agents to check duplication
17-Jul-2017 09:33

Insurance Regulator Irdai has asked insurance companies to collect Aadhaar, the 12-digit unique identity, of their agents for the creation of an online database in order to eliminate duplications. The Insurance Information Bureau of India (IIB) will house the database.

The regulator said the creation of the database started with the issuance of Point of Sales person guidelines.

The purpose was de-duplication of POS enrolled by insurers and insurance intermediaries, said the Insurance Regulatory and Development Authority of India (Irdai).

Therefore, the Aadhaar number was taken as the unique identifying field to remove duplication, it said.

Going forward, the regulator said, it was viewed that the same logic could be extended to insurance agents and trained and qualified persons of insurance intermediaries that would include broker, qualified persons with Aadhaar number as the unique identifying field.

Further, Irdai is of the view that such a portal should be developed and housed in IIB as it has successfully demonstrated the understanding and capabilities in developing the POS portal.

The IIB has been asked to develop the portal for uploading the Aadhaar number and other details of insurance agents on the lines of POS, the Irda said.

"The insurers are therefore advised to collect the same so as to be ready to upload the necessary information on the date to be communicated by the Authority in due course," it said.

The portal will also be available to insurance intermediaries. The insurance intermediaries have also been asked to collect the Aadhaar number and other details of trained and qualified persons of insurance intermediaries so as to be ready to upload the necessary information.
LIC trims 2% of its stake in Mahindra & Mahindra, brings it down to 10%
15-Jul-2017 19:20

Mahindra & Mahindra on Saturday said Life Insurance Corporation of India (LIC) has divested 2 per cent stake in the company.

Post the stake sale of the 2.001 per cent shares, LIC now has 9.958 per cent stake in the company, M&M said in a filing to BSE.

LIC earlier had 11.959 per cent stake in the company, the company added.

The insurance firm has sold over 1.2 crore shares through market sale, M&M said.
Life insurers' June month premium up 13% at Rs 14,466 crore
14-Jul-2017 17:35

The new business premium of life insurance companies rose 13 per cent to Rs 14,466.13 crore in June, shows data from sector regulator Irdai.

New premium income of all 24 life insurers in the country was at Rs 12,810.04 crore in June 2016.

Country's largest life insurer LIC reported an increase of 11.7 per cent in premium during the month at Rs 10,450.47 crore, as against Rs 9,354.52 crore a year ago.

For the rest 23 private sector players, the total business premium in June increased 16.2 per cent to Rs 4,015.65 crore from Rs 3,455.52 crore, the Insurance Regulatory and Development Authority of India (Irdai) data showed.

Among private players, SBI Life's premium income jumped 37 per cent to Rs 805.55 crore from Rs 588.32 crore a year ago.

ICICI Prudential Life's new premium income during the month was up 12.7 per cent to Rs 668.69 crore against Rs 593.55 crore and HDFC Standard Life reported an increase of 13.4 per cent at Rs 685.31 crore.

DHFL Pramerica Life witnessed a jump of over two times in premium income at Rs 131.51 crore and Canara HSBC OBC Life stood at Rs 106.73 crore, up from from Rs 80.47 crore a year ago.

Sahara Life's premium income fell to Rs 1.82 crore from Rs 2.44 crore a year ago.
Nippon Life Insurance completes acquisition of 49% stake in Reliance Nippon Life
14-Jul-2017 09:50

Reliance Capital, the holding company of Reliance Nippon Life Asset Management (RNLAM), said it has received Rs 378 crore from Nippon Life Insurance, a Fortune-500 company and one of the largest life insurers in the world, to complete the transaction for increasing its equity stake in RNAM to 49%.

Nippon Life Insurance, the Japanese life insurance company, has completed the acquisition of 49 per cent stake in Reliance Nippon Life Asset Management (RNLAM).

Reliance Capital, the holding company of RNLAM, has received Rs 378 crore upon the completion of the acquisition by Nippon life.

Reliance Capital will book capital gains on this final transaction in the quarter ending September 30, 2017, said the company in a statement to BSE.

Nippon life insurance, one of the largest insurers in the world, had acquired 26 per cent stake in RNLAM in 2012. It manages around Rs 34.45 lakh crore in assets.

RNLAM, during the year ended March 31, 2017, announced a year-on-year (y-o-y) increase of 25 per cent in its assets under management (AUM) to Rs 3,58,059 crore. Its total income grew by 9 per cent y-o-y to Rs 1,436 crore and the profit before tax was up by a 16 per cent to Rs 581 crore.

The company RNLAM is one of the largest managers in India in AUM terms.
Life Insurance companies new business premium income up 6% in June FY17
13-Jul-2017 18:29

The new business premium of life insurance companies grew 6 per cent to Rs 33,156 crore in the June quarter, compared to a year ago, aided by private sector.

The first year premium, or premium earned by selling new policies by private sector industry rose 12% to Rs 9,872 crore, data from the Insurance Regulatory and Development Authority showed.

State run Life Insurance Corporation saw new business income grow by 3% to Rs 23,284 crore.

Among the private sector, listed insurer ICICI Prudential reported strong 57% growth in new business income to Rs 1,973 crore in the quarter.

SBI Life, the second largest private sector life insurer, saw 3% decline in new business to Rs 1,798 crore, the data showed.

Other bank promoted insurance company PNB Metlife saw income go up 22% to Rs 230 crore at the end of June 30, 2017.

HDFC Life saw 15% growth while Max Life saw 16% increase in new business income during the quarter.

"The first quarter is generally a lean quarter for insurance sales," said a CEO of a life insurance company. "We will see growth coming in coming months."

The regulator added a new category group yearly renewable premium, which captures the growth in the group term insurance space.

While the industry collected a total of Rs 606 crore under this segment, private sector contributed a large chunk of Rs 536.44 crore. Earlier, group term was clubbed in group insurance premium, which are fund management for corporate either on an annual or regular basis.
SBI Life Insurance gets final approval for IPO from SBI central board
11-Jul-2017 09:47

State Bank of India on Monday said its central board approved dilution of its stake in its life insurance arm through an initial public offer for which it has already secured the sectoral regulatory approval.

"The executive committee of the central board (ECCB) of the bank at a meeting held on July 10, 2017 has accorded the final approval for divestment of SBI's stake in SBI Life through an IPO," SBI said in an exchange filing.

Once it hits the markets, SBI Life Insurance would become the second insurer after ICICI Prudential Life to go public.

Last Friday, the insurance regulator Irdai approved SBI Life's Rs 7,000 crore IPO application, making it the largest share sale by a life insurer in the country. But the company is awaiting the final approval from the markets watchdog Sebi.

Pending all the approvals from all regulators, the board has decided to go ahead with the share sale of up to 8 crore equity shares, the price of which will be fixed later in consultation with selling shareholders-the parent SBI, and the foreign partner BNP Paribas Cardiff, the filing said.

SBI Life has hired BNP Paribas, Citi, Kotak Investment Bank and Axis Capital to manage the initial share sale.

SBI Life is a joint venture between State Bank and BNP Paribas Cardiff in which SBI holds 70.1 per cent and BNP Paribas Cardiff 26 per cent. Private equity firm KKR and Singapore-government owned investment company Temasek hold 1.95 per cent each in the life insurer.

SBI Life is the second largest private life insurer after ICICI Prudential. In December, KKR and Temasek bought 1.95 per cent each at Rs 460 per share, which valued the insurer at Rs 46,000 crore.

SBI Life's net profit grew 10.9 per cent to Rs 954.65 crore in the year to March 2017 from Rs 861.03 crore in the previous year.