SBI General looks to raise Rs 700-crore debt
SBI General Insurance aims to raise ₹700 crore in subordinated debt even as its equity valuation soars past ₹30,000 crore, surging two-and-a-half times in just more than five years. Despite its solvency margin of 1.9, the company is raising debt to fund expansion.
«We have been growing at 23%, which is significantly faster than the market growth rate of 13%,» said Kishore Kumar Poludasu, MD, SBI General Insurance.
The bond has a term of 10 years until February 2034 with a call in February 2029. The issue size is of ₹350 crore, with a green shoe option of another ₹350 crore.
With the regulator's thrust on 'Insurance for All by 2047' and several regulations toward increasing the insurance penetration, the company sees growth opportunities.
«We are raising the funds so that the growth and expansion plans can continue,» he added.
SBI General Insurance's market share among the private sector general insurance companies, including standalone health insurers, is 6.19%.
The company is ranked 7th among private general insurers as of December 2023. It had reported profit after tax of ₹135 crore in the nine month ended December 2023 and ROE of 5.1%. The company underwrote gross written premium of ₹8,629 crore in April-December 2023, a 24% jump from ₹6,943 crore in the corresponding period a year ago.
«Health portfolio, which grew at 24% (in the first half) and constituted about 21% of the company's overall premium portfolio, was the primary driver for growth,» said Crisil Ratings in a note recently, «Motor, the largest
