Country’s largest lender, State Bank of India(SBI), has divested 4 per cent of its stake in its non-life insurance arm SBI General Insurance, to two companies on Wednesday for a total consideration of Rs 482 crore.


For the deal, SBI General has been valued at Rs 12,000 crore.  


While the 1.6 per cent of stake has been picked up by Axis AMC, balance 2.35 per cent of stake has been bought by Premji Invest, the private investment arm of Wipro chief Azim Premji.Axis New Opportunities AIF – I represented Axis AMC will purchase 1.65 per cent from SBI while PI Opportunities Fund – I, and an investment fund of Premji Invest will purchase a 2.35 per cent stake.'


Analysts have observed that SBI’s through the current disinvestment is testing the market as SBI General is planning to be listed in 2019-20.


Confirming  the development Pushan Mahapatra, MD & CEO, SBI General Insurance said that his company will approach the sectoral regulator, IRDAI for its approvals for the two deals.


He hoped that the company would get listed sometime during the next fiscal.


Rikhil Shah, chief financial officer of SBI General, said, “This is a good price discovery for pre-IPO for the company.Moreover, Shah hoped that the company’s valuation would go further up by the fiscal-end.


Kotak Mahindra Capital were the financial advisors for the transaction, while J Sagar Associates were the legal advisors.


After the current disinvestment, SBI’s share in SBI General will fall to 70 per cent while IAG, the Australian partner in the company , continues to hold 26 per cent in the joint venture.


SBI General Insurance will announce its Q2 results on Oct 28.


For the quarter ended 30 June 2018, SBI General posted a 126 per cent year-on-year growth in net profit at Rs 1.13 billion.Further, the company recorded its first sustainable underwriting profit of Rs 70 million in June 2018, as compared to an underwriting loss of Rs 460 million during the quarter ended June 2017.


On Wednesday, SBI Chairman Rajnish Kumar said, "All our subsidiaries have done exceedingly well. They hold large value waiting to be unlocked. We have plans to unlock that potential in the current as well as in the next year. The insurance segment is still young and nascent in India, it is a highly under-penetrated market, we foresee a significant scope of growth for SBI GI to achieve size, scale and profitability."