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SBI Life, Temasek-backed Godrej Agrovet get SEBI nod for IPO

11 September, 2017

SBI Life Insurance Co Ltd, a joint venture between State Bank of India and BNP Paribas Cardif, and Godrej group firm Godrej Agrovet Ltd, which counts Singapore’s state investment firm Temasek Holdings as its backer, have received the Securities and Exchange Board of India’s approval for an initial public offering.

The capital markets regulator issued final observations on SBI Life’s IPO plans on 4 September and Godrej Agrovet’s proposal on 8 September. This takes the total number of companies that have received SEBI’s nod for an IPO so far this calendar to 26, showed information on the SEBI website.

SBI Life had filed its draft proposal with SEBI on 17 July.

VCCircle was the first to report on merchant bankers’ appointment for SBI Life’s IPO.

India’s second-largest private life insurer after ICICI Prudential is looking to launch its IPO as early as next week, two persons familiar with the matter told VCCircle. The public issue comprises sale of 120 million shares, representing a 12% stake dilution on a post-offer basis.

SBI Life IPO size is estimated at Rs 8,000 crore, which may value the life insurer at upward of Rs 66,000 crore, said the persons mentioned above.

SBI has proposed to sell 80 million shares while its JV partner will sell the remaining 40 million shares through the proposed IPO.

SBI, the country’s largest lender by assets, owns a 70.1% stake in the insurer while the Dutch partner holds 26%.

SBI’s board, in March this year, had given in-principle approval to initiate the process of floating an IPO of its life insurance arm.

SBI did not give any other details of the planned issue.

SBI Life will be the second life insurer to float an IPO; ICICI Prudential Life Insurance Co Ltd made its trading debut in September last year. Its shares have risen by a fifth since the debut, taking its market capitalisation to around Rs 58,880 crore.

In December 2016, SBI had sold a 3.9% stake to Singapore state investment firm Temasek Holdings (1.95%) and private equity giant KKR & Co (1.95%) for Rs 1,794 crore ($265 million). The deal valued SBI Life at Rs 46,000 crore.

SBI Life has appointed JM Financial Institutional Securities, Axis Capital, BNP Paribas and Citigroup, among eight merchant bankers, for the IPO.

Other names include Deutsche Equities India, ICICI Securities, Kotak Mahindra Capital Co and SBI Capital Markets.

Godrej Agrovet

Godrej Industries’ agri-business subsidiary Godrej Agrovet, which is backed by Singapore state investment firm Temasek Holdings, filed its draft proposal on 19 July.

The IPO comprises a fresh issue of shares worth Rs 300 crore besides an offer for sale (OFS) by promoter Godrej Industries and V-Sciences Investments Pte, the investment arm of Temasek.

Temasek, which holds a 20% stake in the firm, has proposed to sell 12.3 million shares, marking a part-exit. Adi Godrej-led Godrej Industries did not disclose the quantum of shares it aims to sell through the IPO.

The total issue size is estimated at Rs 1,200 crore, two persons privy to the development told VCCircle.

It will be the first IPO by a Godrej company in more than eight years. Godrej’s real estate arm Godrej Properties went public with a Rs 500-crore IPO in December 2009.

VCCircle previously reported that the company is seeking a valuation of Rs 6,500-7,000 crore ($1.01-1.10 billion).

Temasek had invested in Godrej Agrovet in in December 2012, picking up almost a fifth of the company for Rs 572 crore ($105 million then). This was the single-largest alternative investment in the agri-business segment in India and valued Godrej Agrovet at around Rs 2,860 crore ($525 million then).

At the asking valuation of around $1 billion, Temasek would be sitting on 2.5 times gains in local currency terms and two times gains in US dollar terms.

Godrej Agrovet is the largest manufacturer of compound feed in India, producing 1.1 million tonnes of feed and nutrition products for dairy cattle, poultry and aquaculture annually. It also has palm oil plantations and makes hybrid seeds.

Kotak Mahindra Capital Co, Axis Capital and Credit Suisse Securities (India) are merchant bankers for the proposed IPO.

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SBI Life, Temasek-backed Godrej Agrovet get SEBI nod for IPO

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