SBI Life’s shares drop after Carlyle stake saleNovember 20 2019 by Yvonne Lau
Private equity giant Carlyle Group will sell a 3% stake in India’s SBI Life valued at US$391 million.
The sale will be done through a block deal at an 86% profit in eight months. In March of this year, Carlyle Group’s investment unit CA Emerald Investments purchased a 9.2% stake in SBI Life for US$650 million – the group’s largest-ever Indian investment.
After news of the sale broke, shares of SBI Life fell as much as 7% — the most in more than eight months. The Indian insurer also reported a net profit decline of 48% ended September.
However, there has been an upsurge of interest in Indian life firms in the past 18 months due to strong earnings, growth potential and under penetration.
India’s fast-growing economy and ramping up of foreign investment may mean more M&A activity is on the way.
SBI Life is a joint venture, majority owned by the State Bank of India with French bank BNP Paribas sharing ownership.
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