State Bank of India (SBI) has called off plans to launch an initial public offering (IPO) for its general insurance joint venture (JV) SBI General.

SBI chairman Rajnish Kumar said that there is no additional capital requirement so the bank has dropped its earlier plan to list its general insurance JV, reported PTI.

According to a recent estimate, SBI General is valued at more than INR120bn ($1.67bn). SBI, which is the largest public sector bank in India, was planning to list SBI General Insurance in fiscal 2021.

SBI General Insurance Company was formed by State Bank of India and Insurance Australia Group (IAG) in 2010. SBI holds 74% of the total capital in the JV, while IAG owns the remaining 26%. IAG is looking to exit the JV completely.

Six private equity funds namely Carlyle, ChrysCapital, PremjiInvest, as well as GIC of Singapore, are shortlisted to acquire a 26% stake in SBI General Insurance. The transaction is expected to be valued at around INR30bn ($419.5m).

American investment banker Goldman Sachs has been selected to oversee the process of divestiture.

SBI to divest up to 4.5% stake in life insurance arm

Recently, SBI decided to divest up to 4.5% stake in its insurance joint venture SBI Life Insurance to raise up to INR34.65bn ($487.6m).

The divestment will enable the SBI to reduce promoter shareholding in the venture to comply with the regulatory requirements.

Following the completion of the share sale, SBI’s shareholding in SBI Life will decrease to 57.6% from 62.1%.