BoB-backed IndiaFirst Life Insurance gets regulator approval for IPO

Company seeks to raise about Rs 500 cr from fresh issue of shares, draft papers say

IndiaFirst Life Insurance, which is backed by Bank of Baroda, has got the market regulator’s approval for its initial public offering (IPO), paving the way for the fourth life insurer to be listed on the bourses.

The private insurer filed its draft papers with Securities and Exchange Board of India to float an IPO in October 2022. ICICI Prudential Life Insurance, HDFC Life Insurance, SBI Life Insurance, and Life Insurance Corporation (LIC) are listed firms.

As per the draft papers, IndiaFirst seeks raising about Rs 500 crore from fresh issue of shares. There will also be an offer for sale of 141.2 million shares by the promoter and other selling shareholders. The company will use proceeds from the fresh issuance of shares worth Rs 500 crore to augment its capital base to support solvency levels.

Bank of Baroda, which holds 65 per cent stake in the life insurer, will offload a little over 89 million equity shares. Carmel Point Investments India, which is incorporated under the laws of Mauritius and owned by private equity funds managed by US-based Warburg Pincus LLC, US, will offload a little over 39 million equity shares.

IndiaFirst said in a statement it is in consultation with its merchant bankers to the issue and may consider a private placement, preferential allotment, rights issue and any such other method aggregating up to Rs 100 crore. If such placement is completed, the fresh issue size will be reduced accordingly.

ICICI Securities Limited, Ambit Private Limited, BNP Paribas, BOB Capital Markets Limited, HSBC Securities and Capital Markets (India) Private Limited, Jefferies India Private Limited and JM Financial Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer.

IndiaFirst will be the ninth insurer to list on the bourses. Four life insurance companies and four general insurance companies--ICICI Lombard General Insurance, New India Assurance, General Insurance Corporation (GIC Re), and Star Health & Allied Insurance--are listed. Max Life insurance is not directly listed on the exchanges but its holding company Max Financial Services is.

As per its draft papers, IndiaFirst reported a net loss of Rs 41 crore in Q1 FY23 and Rs 281.6 crore in FY22. It earned a profit of Rs 30.89 crore in FY21. In Q1FY23, the insurer earned a new business premium of Rs 501 crore and renewal premium of Rs 406.92 crore. Its assets under management (AUM) were to the tune of Rs 18,637 crore.