SBI General Insurance is an unlisted subsidiary of the bank. SBI recently concluded a successful IPO for its life insurance unit, and is expected to also float its general insurance unit in the future.
SBI said it sold 8.62 million shares of SBI General Insurance as part of the divestment.
The deal implies a valuation of Rs 558.85 per share, or Rs 12,050 cr for SBI General Insurance.
The shares were purchased by Axis New Opportunities Fund, an alternative investment fund managed by Axis Asset Management Company.
Alternative investment funds are similar to mutual funds, but typically invest in higher-risk targets and are targeted at sophisticated investors such as high-net-worth individuals or HNIs.
PI Opportunities Fund is operated by Premji Invest, a firm owned by Azim Premji, the promoter of Wipro. It is estimated to have a corpus of over $1 billion.