The life insurance unit of ICICI Bank Ltd, India's biggest private-sector lender, is seeking a valuation of as much as Rs 47,950 crore ($7.2 billion) in the country's first initial public offering by an insurer.
The IPO of ICICI Prudential Life Insurance Co Ltd will open for subscription on 19 September and close two days later, ICICI Bank said in a stock-exchange filing.
The company will sell 181.34 million shares in a price band of Rs 300-334 apiece. The issue size represents about 12.63% of the insurer's post-offer equity share capital. At the upper end of the band, the issue will raise about Rs 6,050 crore ($910 million). This will make it the biggest IPO in India since state-run Coal India Ltd's issue six years ago.
The targeted valuation is almost 50% higher than last year when Singapore state investment arm Temasek acquired a 2% stake in a deal that valued the company at Rs 32,500 crore. This transaction also included PremjiInvest, the private investment arm of Wipro Ltd chief Azim Premji, buying a 4% stake in ICICI Prudential.
Mumbai-listed ICICI Bank itself has a market value of Rs 1,59,789 crore (about $24 billion).
ICICI Prudential Life had filed draft papers for its IPO with the Securities and Exchange Board of India in July and got regulatory approval earlier this week.
ICICI Bank owns a stake of 67.5% in the insurer while the UK-based Prudential Plc holds almost 26%. The IPO comprises only a share sale by ICICI Bank and Prudential isn’t selling its stake.
ICICI Prudential is one of India’s top three private-sector life insurance companies. SBI Life, a joint venture of State Bank of India and BNP Paribas, and HDFC Standard Life Insurance Company Ltd, a joint venture of Indian mortgage lender Housing Development Finance Corp. and the UK-based Standard Life Plc, are the other top private-sector life insurers.
India’s crowded life insurance industry has 24 companies and the sector is dominated by state-run Life Insurance Corporation.
HDFC had in April stated its intent to take its life insurance unit public by selling a 10% stake through an IPO. But it said in June that HDFC Standard Life and Max Life Insurance Company Ltd had agreed to discuss a possible merger. The merger deal was finalised last month and will create the biggest private-sector life insurer in India.
ICICI Prudential Life began operations in 2001. It had assets under management of Rs 103,939 crore as on 31 March 2016 and earned gross premium income of Rs 19,164 crore in 2015-16. Its profit after tax was Rs 1,653 crore in 2015-16.
The firm has hired 10 bankers to manage the share sale. Bank of America Merrill Lynch and ICICI Securities are the lead bankers. Other bankers include Deustche Bank, HSBC Securities, UBS Securities, JM Financial, IIFL Holding, CLSA, Edelweiss and SBI Capital Markets.
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