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KKR Sells Stake in SBI Life worth $73 Million

KKR & Co. Inc was previously known by the name of Kohlberg Kravis Roberts & Co. It is an extremely well-known global investment firm. This firm prominently manages diverse types of asset classes. These asset classes include private equity, real estate, infrastructure, energy, and credit. They also manage hedge funds through their strategic partners. KKR was founded in the year of 1976 by cousins George R. Roberts and Henry Kravis, and Jerome Kohlberg, Jr. Over the decades, the business of KKR spread across five continents, and it now has its offices in 16 countries throughout the planet.

The shares of SBI Life Insurance were ideally held by the Value Line Pvt Ltd, which is an affiliate of KKR. They essentially sold 6.5 million shares of the Indian company for Rs.775 apiece. This sale went on to fetch KKR approximately $73 million [Rs.503.7 crore]

Before this sale, KKR held a total of 19.5 million shares in the Indian insurance company. This subsequently represented its 1.95% stake in this life insurance firm. The Value Line Pte Ltd has acquired the stake of SBI Life in December of 2016. During this time, Value Line Pte Ltd, as well as a Singapore state-owned investor known as Temasek bought 19.5 million shares each in the life insurance firm. They bought this share from its promoter, the State Bank of India. Back then, Value Line and Temasek had purchased these shares for an overall total of Rs.1, 800 crores. Each of these two companies had purchased the shares of the Indian life insurance firm at the price of Rs.460 per share.

In September of 2017, the SBI Life Insurance went public in an IPO. After this, its promoters BNP Paribas Cardiff, as well as State Bank of India sold shares worth Rs.8,400 crore. In the IPO, the shares of this life insurance company were sold for Rs.700 per share.

KKR and India

In 2018 December, the co-chairman and co-CEO of the global private equity firm of Kohlberg Kravis Roberts and Co, Mr. Henry Kravis, underlined that buyout transactions and Private credit would be the core form of the operations of the company in India. He was visiting Mumbai back then and spoke about the rapidly flourishing business of KKR. He talked about how the company has all the capital they need and how much more they are in the credit business than ever before.

Kravis spoke about India as a terrific place to put capital, as well as to invest in hospitals, waste management, and infrastructure. He also said that they could invest money in any part of the world that has the right capital structure. He talked about the key USP of KKR, which is to buy a company, go on to improve its operations tremendously, hold the firm for about five to ten years, and then enjoy the profits it reaps.

According to Mr. Henry Kravis, India does need to improve on several fronts. These include improving the ease of doing business, as well as removing stringent regulatory bottlenecks. He additionally said how there is no significant bond market in India while mentioning that the absence of a long-term bond market can be a factor in limiting growth. The bond market is a key provider of capital.

Kravis however also went on to remark that the nation has indeed done well with its pace of reforms in the recent years. He highlighted how India has over the years effectively transformed itself into an investment bright spot, and subsequently is viewed with renewed optimism by investors around the planet. Karvis spoke about how India is the fastest growing economy in the globe and has much room for progress. He even mentioned how the nation has a pro-business government who is trying to take steps to do what is needed in India to improve is the business sphere. Talking about the prospects for India, Kravis said that going forward, the country would have a great amount of liquidity, both fiscal and monetary, to put into the system.

Henry Kravis, while being a firm believer that a nation must have a deep and broad capital market, commended on how India has taken a good step by incorporating a bankruptcy law. He also spoke about the positive changes made in the real-estate laws, as well as the standardized tax system of the nation.

Written By: PolicyBazaar - Updated: 04 June 2020
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