Stock Market

ICICI Pru Life IPO to open on Sep 19, price band Rs 300-334/sh

Chillicious Bureau

ICICI Prudential Life Insurance Company initial public offer (IPO) will open for subscription on September 19 and close on September 21. The first IPO by an insurer in India and biggest in nearly six years has fixed its price band of the issue at Rs 300-334 per share. The insurance company from ICICI stable is aiming to raise Rs 5000 crore through an initial public offering.

The insurer is a joint venture between banking major ICICI Bank and UK’s Prudential Corporation Holdings. ICICI Bank has around 68 percent stake in the company, while Prudential holds 26 percent. The public offer comprises up to 18,13,41,058 equity shares of ICICI Prudential Life Insurance Company, representing about 12.65 per cent of its equity share capital for cash, through an offer for sale by ICICI Bank, as per the draft papers.

The company, which filed the draft red herring prospectus got market regulator’s approval on September 2.

Singapore’s Temasek and PremjiInvest also are shareholders. The offer includes a proposed reservation of up to 1,81,34,105 equity shares (10 percent of the offer) for shareholders of ICICI Bank. Prudential will not dilute its stake in the IPO of ICICI Prudential Life Insurance Company while ICICI Bank will be selling its 12.65 per cent stake in the insurer. The size of the IPO is estimated to be worth around Rs 5,000 crore, sources said.

This would be the biggest initial public offering after Coal India. The state-run firm had hit the capital markets in 2010 to raise over Rs 15,000 crore. Last November, ICICI Bank sold nearly 6 percent stake in ICICI Prudential to Temasek and PremjiInvest.

The shares were offloaded for around Rs 1950 crore valuing the insurer at Rs 32,500 crore. PremjiInvest holds 4 per cent in the insurance company while Temasek owns 2 per cent in the firm. At the end of March this year, the assets under management of ICICI Prudential — which started operations in fiscal year 2001 — stood at Rs 1,039.39 billion, as per its website.

Bank of America Merrill Lynch and ICICI Securities are global book running lead merchant bankers (BRLM) to the issue. Others are CLSA, Deutsche, Edelweiss, HSBC, IIFL, JM Financial and SBI Capital Markets. A maximum 50 percent of the issue size will be reserved for qualified institutional buyers (QIBs), out of which up to 60 percent for anchor investors and 5 per cent for mutual fund players. Besides, 35 per cent of total offer size will be set aside for retail investors, with the remaining 15 per cent for non-institutional investors.