IAG weighs SBI General Insurance stake sale

Insurance Australia Group (IAG) is considering selling a stake in SBI General Insurance, a joint venture with India’s largest lender, according to informed sources.

IAG, which holds 26 percent stake in the general insurer, has started preliminary talks to hire an investment bank to manage the sale process, the sources said, requesting anonymity. IAG is likely to sell its stake in multiple tranches. The Sydney-based company might sell a part of its stake before a proposed initial share sale of the local general insurer, and a part in the initial public offering, the person said, adding that it might sell more over a period of time.

IAG’s plan to sell a stake in the insurance joint venture follows a four percent stake sale in the insurance company by SBI. In September, SBI sold the stake in SBI General Insurance to Axis Asset Management Co. Ltd and Premji Invest for INR482 crore. The transaction valued SBI General Insurance at INR12,000 crore. SBI’s stake in the venture dropped to 70 percent following the sale, while IAG continued to own 26 percent. SBI General Insurance started operations in 2010 and sells products ranging from motor, health, travel and home insurance in the retail space to aviation, fire, marine and liability insurance in the commercial space.