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Rediff.com  » Business » ICICI Pru Life IPO to open on Sep 19

ICICI Pru Life IPO to open on Sep 19

September 10, 2016 09:25 IST

ICICI Pru's IPO is being managed by 10 investment banks, including Bank of America Merrill Lynch and ICICI Securities

ICICI Prudential Life Insurance Company’s Rs 6,057-crore initial public offer (IPO) of equity, the first by an Indian insurance company, will hit the markets on September 19.

The issue is priced at Rs 300-334 a share. ICICI Bank, which owns 68 per cent stake, will sell 12.65 per cent (181 million shares) in the IPO.

At the top end of the price band, the IPO will raise Rs 6,057 crore (Rs 60.57 billion), making it the fifth largest in the domestic market and the biggest since Coal India’s in 2010. At the lower end, it will be able to mop Rs 5,440 crore (Rs 54.4 billion). The life insurer will be valued anywhere between Rs 43,000 crore (Rs 430 billion) and Rs 47,890 crore (Rs 478.9 billion), depending on where the issue gets priced.

The shares of ICICI Bank on Friday ended 0.8 per cent lower at Rs 274. At the current price, the bank is valued at Rs 1.59 lakh crore. The lender’s stake in its insurance subsidiary is valued at as much as Rs 32,500 crore (Rs 325 billion).

Interestingly, ICICI Pru Life’s valuation has soared 45 per cent in less than a year. The insurer was valued at Rs 32,500 crore in November 2015, when ICICI Bank sold six per cent stake to Wipro’s Azim Premji and the Singapore government’s Temasek.

Britain's Prudential Holdings, which owns nearly 26 per cent in the insurer, will not be selling any stake in the IPO. The issue, however, will allow participation from foreign investors, as their investment ceiling in insurance companies was raised earlier this year by the government from the earlier 26 per cent to 49 per cent.

ICICI Pru's IPO is being managed by 10 investment banks, including Bank of America Merrill Lynch and ICICI Securities. It comes at a time when both the primary and secondary market are witnessing a lot of buoyancy.

The benchmark indices are close to their all-time highs, while the capital raising through IPOs is set to climb to a six-year high.

Illustration: Uttam Ghosh/Rediff.com

Samie Modak in Mumbai
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