SBI General Insurance Ltd. (SBIGIL) is looking to hit the market with an initial public offering (IPO) after October 2019 and will start the preparatory exercises in this direction by March, Pushan Mahapatra, managing director and chief executive officer said.
SBIGIL is a joint venture between the State Bank of India (SBI) and Insurance Australia Group (IAG), which started operations in 2010 offering retail and commercial general insurance products. Its offerings include motor, health, personal accident, travel and home insurance in the retail space and aviation, fire, marine, construction and engineering and liability insurance in the commercial space. Recently, SBI had shed 4% stake in favour of two funds. “The dilution was a price-discovery move,” said Mr. Mahapatra.
IPO drill from March
Indications are that the principal promoter would time the market entry well after the 2019 general elections. “We will start the IPO drill from March. One can expect the IPO from third quarter of 2019-20,” he said.
Mr. Mahapatra did not perceive a threat from the proposed merger of the three big PSU general insurance companies. “It would be good for the industry, as there may be lesser battles to be fought on the pricing front,” he said.
He said by 2021, SBIGIL aimed to be among the top general insurers in the 33-player market in India. In 2018-19 first half, it moved up a notch to seventh position in terms of gross written premium, which was ₹2,067 crore from ₹1,593 crore a year earlier. Profit was ₹217 crore versus ₹132 crore.
SBIGL is confident of maintaining its trend of outstripping industry growth rates. “We outstripped industry, growing by 30% in the first half against an industry rate of 12 %.. this has been possible due to our product-spread,” Mr. Mahapatra said, adding that over the last few months SBIGIL had taken hits on account of Kerala ( ₹148 crore), Titli ( about ₹15 crore) and Gaja ( anticipated ₹25 crore).
