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Bank of India may Sell 27% in Star Union Dai-ichi Life

A senior executive said the bank is seeking to sell the stake by the end of the financial year.

, ET Bureau|
Last Updated: Nov 04, 2019, 08.01 AM IST|Original: Nov 04, 2019, 08.01 AM IST
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IDBI Federal Life insurance is another company on the block after it was acquired by Life Insurance Corporation.
Mumbai: Bank of India is looking to sell 27 per cent in Star Union Dai-ichi Life Insurance Company to raise around Rs 1,200 crore, valuing the company at around Rs 3,800 crore.

It is also looking to offload stakes in Bombay Stock Exchange (BSE), NSDL and Equifax to raise a total of Rs 1,800 crore, exiting non-core businesses and raising funds that can shore up the lender’s equity capital.

A senior executive said the bank is seeking to sell the stake by the end of the financial year.

“BOI is looking to sell 27 per cent and retain 2 per cent in the life insurance venture,” said the executive. “This will help us raise capital by offloading stake in non-core assets. We are looking to raise a total of Rs 1,800 crore by selling non-core assets held in various companies.”

It had floated the request for proposal earlier this year but did not receive bids eligible for sale. Star Union Dai-ichi Life Insurance is a joint venture (JV) of Bank of India, Union Bank of India and Dai-ichi Life.
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Bank of India is the largest Indian shareholder with 28.96 per cent stake in the joint venture, while Union Bank of India owns 25.10 per cent and Daiichi Life 45.94 per cent. In 2016, when the foreign direct investment limit was raised, Daiichi had bought 18 per cent from Bank of India, valuing the company at Rs 3,000 crore. The laws allow foreign shareholders to own up to 49 per cent in Indian insurance companies.

In the first half of the financial year, Star Union Dai-ichi saw 17 per cent increase in annualised premium equivalent to Rs 2,394 crore, in line with the industry’s premium collection. Star Union Daiichi started operations in 2008 with an initial capital of Rs 400 crore, which included share premium brought in by Daiichi. The promoters later invested Rs 100 crore, taking the share capital to Rs 500 crore. Last year, Warburg Pincus had bought 26 per cent in IndiaFirst Life Insurance from existing investor Legal & General Group for Rs 710 crore, valuing the company at Rs 2,900 crore.

IDBI Federal Life insurance is another company on the block after it was acquired by Life Insurance Corporation.


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Star Union Dai-ichi Life's premium grew by 36.3 pc at Rs 1,271.95 cr in FY12

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