India: ICICI Prudential IPO  likely in week beginning 19 Sept

Photo: Pradeep Gaur/Mint

ICICI Prudential Life Insurance Co. is likely to launch its share sale to raise at least Rs.5,000 crore in the week of 19 September, said three people aware of the development on condition of anonymity.

The company, which filed the initial share sale documents with the Securities and Exchange Board of India (Sebi) on 18 July, received the regulator’s approval on 2 September.

On 29 June, Mint reported that ICICI Prudential could launch its initial public offering (IPO), the first by an insurer in India, in September.

The insurer is a venture between ICICI Bank Ltd and UK’s Prudential Corp. Holdings. As of 31 March, ICICI Bank held a 67.6% stake in the life insurance firm and Prudential Corp. Holdings 25.9%. Singapore’s Temasek Holdings Pte. Ltd and Azim Premji’s investment company PremjiInvest are also shareholders in the company.

“ICICI Prudential is looking at a tentative timeline of third week for the launch, with 20 or 21 September as the likely date. Investor road shows have been going on for the past few weeks and there’s significant demand for the company to go ahead and launch the offer,” said one of the three people cited above.

A decision on the price band will be taken in a couple of days, this person added.

“There is a strong appetite for the IPO and the anchor book is already oversubscribed. There are a handful of investors who want to buy stakes worth up to $100 million. The demand from US-based investors is very high,” he said.

A second person said the insurer is likely to be valued at between Rs.45,000 crore and Rs.48,000 crore, based on discussions with investors during the roadshows.

The public offer comprises sale of 181.34 million equity shares of ICICI Prudential Life, representing about 12.65% of the equity capital, through an offer for sale by ICICI Bank, according to the draft filing. Prudential will not dilute its stake.

Investment banks ICICI Securities Ltd and Bank of America Merrill Lynch have been hired as the Tier-I banks to manage the share sale.

Bank of America Merrill Lynch declined to comment. ICICI Prudential Life Insurance and ICICI Securities did not respond to emails.

The other banks hired to manage the share sale are CLSA India Pvt. Ltd, Deutsche Equities India Pvt. Ltd, Edelweiss Financial Services Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd, IIFL Holdings Ltd, JM Financial Institutional Securities Ltd, SBI Capital Markets Ltd and UBS Securities India Pvt. Ltd.

In November, ICICI Bank sold 6% stake in the life insurance company in a transaction that valued the insurer atRs.32,500 crore. Of this, 4% was acquired by billionaire PremjiInvest and its affiliates. The remaining 2% was bought by Compassvale Investments Pte. Ltd, a wholly-owned unit of Temasek Holdings.

The deal was valued at about Rs.1,950 crore.

Other insurance firms are also looking to tap the market.

In May, Business Standard reported that SBI Life Insurance, a joint venture of the State Bank of India and BNP Paribas Cardiff, is likely to sell shares to the public.

On 19 April, the board of Housing Development Finance Corp. Ltd (HDFC) approved a proposal to sell around 10% in HDFC Standard Life Insurance Co. to the public.

In June, HDFC Standard Life, Max Financial Services Ltd and its unit Max Life Insurance Co. Ltd announced merger talks that may lead to the creation of an insurance firm with Rs.1.1 trillion in assets.

The merger will eventually result in the listing of HDFC Standard Life, as Max Financial Services already trades on the Indian exchanges.

The combination of the entities would become India’s largest private sector life insurer, surpassing ICICI Prudential Life Insurance. It will be second only to state-run Life Insurance Corp. of India, which has a 70% share of new business premiums in the country.

As of 31 December 2015, ICICI Prudential Life had assets under management of Rs.1.01 trillion.

The insurance sector has assets under management of Rs.22.4 trillion, of which the share of India’s 23 private sector insurers is only Rs.4.61 trillion, according to the Insurance Regulatory and Development Authority of India. The insurance industry generated Rs.3.28 trillion in premiums last year, of which the private sector’s share wasRs.88,433 crore.

Also read:

Apis PE, ICICI Venture buy stake in Star Health Insurance

Temasek invests in ICICI as Indian banks move to clear bad loans

This story was first published on Livemint

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.