The government of India passed the new insurance law which allows 49 percent stake by the foreign companies in the insurance sector but with the condition that the control over the management must vest with the local partner .Soon after the new insurance law was ratified many foreign companies came forward to increase its stake in the joint ventures of the country. Bupa Insurance ,the British insurance company where the first foreign firm to implement this as it announced to raise its stake in its health insurance venture Max Bupa to 49 percent .
They were followed by the French insurer Axa when it announced to raise its stake in Bharti-Axa Life to 49 percent with Rs 858.6 crore. The Dutch major Aegon also followed this in its joint venture with Religare Life. But as the Times group owner Bennett Coleman & Co bought out Religare Enterprises entire 44 percent stake which forced Religare to exit from the life insurance business. The private general insurer Liberty-Videocon General also applies for increasing its FDI to 49 percent in the next year as US-based Liberty Mutual Insurance Group which owns 26 percent stake has agreed to infuse Rs 320 crore into its joint venture.
The Edelweiss Group also announced that its foreign stake has increased to 49 percent as its Japanese partner Tokio Marine agreed to invest Rs 500 crore.SBI General Insurance a joint venture of State Bank of India with Insurance Australia Group (IAG) appointed two separate auditors for its final valuation to drain further stakes. While the State Bank appointed PricewaterhouseCoopers (PwC) IAG hired Deloitte. Pwc and Deloitte are the two among the Big Four Auditors of the world.
State Bank of India recently proposed it that it would join its stake in life insurance with Star-Union Dai-ichi Life Insurance to 30 percent, where Star Union Dai-ichi Life Insurance is a joint venture between the Bank of India (48 percent), Union Bank of India (26 percent) and Dai-ichi Life Insurance (26 percent).
These all affected the market price SBI in the stock market During the previous 52-week the highest price for its share went up to Rs 335.90 and the lowest was Rs 234.52. The company’s twelve month Earnings per Share (EPS) was Rs 17.32 per share as on March 2015 and the stock’s price-to-earnings (P/E) ratio was Rs.15.26. As on July 21, 2015, the market value of the shares of State Bank of India closed at Rs 264.25 which is 1.56% more than its book value Rs 169.77.
