ICICI Life gets Sebi nod for biggest IPO in 6 years

Although the pricing for the IPO is yet to be finalised, people in the know said the band could be Rs 275-300

ICICI Prudential Life Insurance Company has got approval of the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO), the first by a life insurance company.

The country’s leading private life insurer is looking to hit the markets before the end of this month, according to people close to the development.

ICICI Bank will offload a 12.65 per cent stake in the company through the IPO, which could fetch Rs 5,000 crore (Rs 50 billion).

ICICI Pru Life’s issue will be the biggest IPO since Coal India’s Rs 15,200-crore (Rs 152 billion) IPO in October 2010, and among the 10 biggest in the domestic market. It will also be the largest secondary exit by way of an IPO for a private sector entity.

ICICI Bank now holds a 67.62 per cent stake in the insurer and the UK-based Prudential Holdings owns 25.87 per cent. The remaining shares are owned by entities belonging to Wipro’s Azim Premji and the Singapore government’s Temasek Holdings.

Although the pricing for the IPO is yet to be finalised, people in the know said the band could be Rs 275-300. ICICI Bank is offloading 1.81 billion shares through the IPO.

Narayanan Sadanandan, executive vice-president, SBI Capital Markets, said the IPO offered an opportunity for investors to be a part of the growth story of the insurance sector.

“The insurance industry is keenly looking at the IPO. Three or four other insurance companies want to list,” Sadanandan said.

Around 10 investment banks are managing the IPO, with Bank of America Merrill Lynch and ICICI Securities being the global co-ordinators and book-running lead managers.

Citic CLSA, Deutsche Bank, Edelweiss, HSBC, IIFL, JM Financial, SBI Caps and UBS are the book-running lead managers for the issue.

The IPO could value ICICI Pru Life at around Rs 40,000 crore, nearly 25 per cent higher than the valuation when ICICI Bank offloaded a 6 per cent stake in November 2015.

Seventeen companies have tapped the primary market to raise close to Rs 12,000 crore (Rs 120 billion) this year, according to Prime Database. This is the best fund-raising through IPOs in six years. More than 10 companies are planning to list in the next six months.