Prudential to cut stake in ICICI insurance biz to 20%

ICICI Bank will bring down its stake in ICICI Prudential Life Insurance to 54% (down from 67.52% as of Sep 7) over three years

Private sector lender ICICI Bank will bring down its stake in ICICI Prudential Life Insurance to 54 per cent (down from 67.52 per cent as of September 7) over the next three years. Public shareholding will rise to 25 per cent in the period. It will stand at 19 per cent once the insurer is listed.

The insurer's foreign partner Prudential Corporation Holdings Limited will then hold 20 per cent stake, down from 25.83 per cent  as of September 7, after three years.

This is on account of the the initial public offering (IPO) of shares of ICICI Prudential Life Insurance, which will open on September 19 (Monday) and close on September 21 (Wednesday).

Chanda Kochhar, managing director and chief executive officer of ICICI Bank, said for every financial year since 2002, ICICI Prudential Life has consistently generated highest new business premiums on a “retail weighted received premium basis” among all private sector life insurers in India.

The insurer is a joint venture between ICICI Bank and Prudential Corporation Holdings Limited.

The price band for ICICI Prudential Life Insurance IPO has been fixed at Rs 300-334 per share and they are looking to raise about Rs 6,000 crore. This IPO includes up to 181,341,058 shares of face value of Rs 10 each and includes a reservation of up to 18,134,105 shares for purchase by ICICI Bank shareholders. The offer would constitute 12.63 per cent of the post-offer paid-up equity share capital of the company and the net offer shall constitute 11.37 per cent of the post-offer paid-up equity share capital of the company.

ICICI Prudential Life Insurance posted a profit after tax of Rs 1,650 crore for FY16 compared to Rs 1,634 crore for FY15. The assets under management stood at Rs 1,03,939 crore as of March 31. New business premium stood at Rs 6,766 crore for FY16 compared to Rs 5,332 crore in FY15. The unit-linked insurance plan (Ulip) portfolio stood at 83 per cent while traditional portfolio stood at 17 per cent in FY16 for the insurer.