SBI Life to launch India’s first billion-dollar IPO in seven years

SBI Life’s IPO will be India's biggest since state-run Coal India’s $2.4 billionoffering in 2010. (Reuters)
Updated 14 September 2017
0

SBI Life to launch India’s first billion-dollar IPO in seven years

MUMBAI: SBI Life Insurance Co. will launch next week what will be India’s first billion-dollar initial public offering since 2010, paving the way for a record-setting year for IPOs in the country.
SBI Life, a unit of top Indian lender State Bank of India (SBI), will open the share sale to the public on Sept. 20 and close it on Sept. 22, according to a filing.
The shares, that will begin trading Oct. 3, will be sold in a price range of 685-700 rupees apiece, raising as much as 84 billion rupees ($1.3 billion) for SBI Life’s main shareholders — SBI and BNP Paribas Cardif — which are paring their stakes.
Strong stock markets have fueled a surge in equity deals in Asia’s third-largest economy, with IPO proceeds so far this year exceeding $3 billion. While last year’s $4 billion fundraising from IPOs is set to be surpassed, some expect proceeds to even top the record $8.5 billion raked in seven years ago.
High inflows, including from retail investors into equity markets, are driving sectors that historically never listed in India to explore IPOs, said Arun Kejriwal, founder of Kejriwal Research & Investment Services.
“This augurs well for the capital markets. However, a note of caution: valuations are steep,” Kejriwal added.
SBI Life’s IPO, the third insurer to list in the country, will be the biggest since state-run Coal India’s 155 billion rupee ($2.4 billion) IPO in 2010.
ICICI Lombard General Insurance Co.’s IPO to raise up to $890 million opens on Friday, while HDFC Standard Life Insurance is expected to hit the markets in the coming weeks with what is likely to be another billion-dollar offering.
That will be followed by two other big insurer listings — state-run reinsurer General Insurance Corp. of India (GIC Re) and non-life insurer New India Assurance Co., estimated to raise a total of more than $3 billion.
While the insurers are betting on lower penetration and rising income levels bolstering demand for their products, the government’s plan to pare its stake in five state-run general insurers through IPOs is also going to drive offerings.
In the SBI Life IPO, SBI is selling up to an 8 percent stake, while BNP Paribas Cardif is selling up to 4 percent. The two currently own 70 percent and 26 percent, respectively.
The IPO price range values the insurer at about $11 billion, versus the $7 billion valuation at which SBI sold a nearly 4 percent stake to KKR and Temasek in December.
— Reuters


Pompeo says China is engaging in ‘predatory economics 101’

Would China have allowed America to do to it what China has done to America asked US Secretary of State Mike Pompeo. (AP)
Updated 51 min 50 sec ago
0

Pompeo says China is engaging in ‘predatory economics 101’

  • He said China’s recent claims of “openness and globalization” are “a joke.”

DETROIT: China is engaging in “predatory economics 101” and an “unprecedented level of larceny” of intellectual property, Secretary of State Mike Pompeo told a business audience Monday.
Pompeo made the remarks at the Detroit Economic Club as global markets reacted to trade tensions between the US and China. Both nations started putting trade tariffs in motion that are set to take effect July 6.
He said China’s recent claims of “openness and globalization” are “a joke.” He added that China is a “predatory economic government” that is “long overdue in being tackled,” matters that include IP theft and Chinese steel and aluminum flooding the US market.
“Everyone knows ... China is the main perpetrator,” he said. “It’s an unprecedented level of larceny.”
“Just ask yourself: Would China have allowed America to do to it what China has done to America?” he said later. “This is predatory economics 101.”
The Chinese Embassy in Washington did not immediately respond to a request for comment.
Pompeo raised the trade issue directly with China last week, when he met in Beijing with President Xi Jinping and others.
“I reminded him that’s not fair competition,” Pompeo said.
President Donald Trump has announced a 25 percent tariff on up to $50 billion in Chinese imports. China is retaliating by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.
Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump’s watch. Gary Cohn, Trump’s former top economic adviser, said last week that a “tariff battle” could result in price inflation and consumer debt — “historic ingredients for an economic slowdown.”
Pompeo on Monday described US actions as “economic diplomacy,” which, when done right, strengthens national security and international alliances, he added.
“We use American power, economic might and influence as a tool of economic policy,” he said. “We do our best to call out unfair economic behaviors as well.”