* IPO to open Sept 20, close Sept 22
* Sets price range of 685 rupees to 700 rupees a share -sources
* SBI Life IPO India's biggest since Coal India's 2010 listing (Adds details, milestone)
MUMBAI, Sept 12 (Reuters) - India's SBI Life Insurance Co Ltd will launch an initial public offering next week to raise as much as $1.3 billion, sources with direct knowledge told Reuters, in what will be the country's first billion-dollar IPO in nearly seven years.
SBI Life, a subsidiary of top Indian lender State Bank of India, will open the IPO sale to the public on Sept. 20 and close it on Sept. 22, according to a filing. Two sources said the shares will be sold in a price range of 685 rupees to 700 rupees apiece.
The IPO will raise as much as 84 billion rupees ($1.3 billion) for SBI Life's two main shareholders - State Bank of India and BNP Paribas Cardif - which are paring their stakes.
State Bank of India is selling up to an 8 percent stake, or 80 million shares, in SBI Life, while BNP Paribas Cardif is selling up to a 4 percent stake, or 40 million shares.
SBI Life's IPO is the biggest since state-run Coal India's 155 billion rupee ($2.4 billion) IPO in 2010 and market participants expect 2017 to be a record-setting year for India, with fund-raising from IPOs exceeding 2010's $8.5 billion.
The country has already seen more than $3 billion in IPOs this year, according to Thomson Reuters data, and has a number of upcoming listings from insurers, which should take it well past the $4 billion raised from IPOs last year.
ICICI Lombard General Insurance Co Ltd's IPO to raise up to $890 million opens on Friday, while state-run reinsurer General Insurance Corp of India (GIC Re) and non-life insurer New India Assurance Co Ltd have also filed for IPOs that bankers estimate could raise a total of more than $3 billion. ($1 = 64.0260 Indian rupees) (Reporting by Devidutta Tripathy and S. Anuradha; Editing by Louise Heavens and Susan Fenton)