The country's leading private life insurer SBI Life will invest up to Rs 9,600 crore in Indian equity market this fiscal, taking its capital market exposure to over Rs 34,000 crore, a senior company official said today.
"We will make incremental investment of about Rs 16,000 crore in securities in 2011-12, of which 60% would go to the stock market," SBI Life Insurance Managing Director M N Rao told PTI.
The life insurer has an investment of about Rs 25,000 crore in equities.
"This incremental investment will take the total exposure in capital markets to over Rs 34,000 crore," he added.
The company, which managed assets worth Rs 40,163 crore at the end of March 31, expects over 40% growth in its assets under management (AUM) during the current fiscal.
"We expect to take our AUM to about Rs 60,000 crore. For this, we will make investments in market instruments," Rao said.
SBI Life Insurance is a joint venture between State Bank of India and France-based BNP Paribas Assurance. SBI owns 74% of the total capital in the JV and the rest is held by BNP Paribas Assurance.
For the financial year ended March 2011, the life insurer reported a 33% growth in net profit at Rs 366 crore. Its total premium income grew by 28% to Rs 12,912 crore during the period.
During the fiscal, the new business premium collection stood at Rs 7,572 crore, which is a rise of 7% over the previous financial year.
The company is planning new products in the unit-linked as well in traditional segment for which it has applied to the insurance regulator Irda.
On company's plans to raise funds from the capital market, Rao said SBI Life is a well capitalised company and does not need funds as of now.
"We will wait for clarity on Insurance Bill and IPO guidelines. The initial public offer (IPO) is unlikely to happen in the next 2-3 quarters," he said.
The paid up capital of SBI Life Insurance stands at Rs 1,000 crore.
The Bill, pending with a Parliamentary Standing Committee, has proposed to increase the foreign share holding limit in an Indian insurance firm to 49% from the present 26%.
