ICICI Pru Life to file for Rs 4,700-cr IPO next week

IPO, first by life insurer in India, to be biggest in six years; company to approach Irdai before Sebi

ICICI Prudential Life Insurance is to file for an initial public offering (IPO) of shares with the regulatory authorities as early as next week, said three people with knowledge of the development.  

The deal size is likely to be Rs 4,700 crore, biggest since Coal India’s IPO in 2010. The entire issue will be a secondary share sale by the promoter, ICICI Bank. The insurance venture is the most highly valued one among private entities in the segment.

Before filing with the markets regulator, Securities and Exchange Board of India (Sebi), it will have to get the offer document vetted from the Insurance Regulatory and Development Authority of India (Irdai).

“The IPO document is almost ready. We plan to approach Irdai and then Sebi before the end of this month,” said an investment banker, asking not to be named. A mail to ICICI Pru was not answered.

Before a nod, Irdai will check factors like financial performance, capital structure and solvency margin. And, if the applicant has a 10-year business record. Banking sources said the Irdai nod could take less than a month. Typically, Sebi then takes two to three months for clearing an IPO.

Earlier this week, Chanda Kochhar, managing director at ICICI Bank, at its annual general meeting, had said the aim was to launch the IPO during this financial year. The board of directors had cleared the plan in April.

In November last year, ICICI Bank had said it would sell a six per cent stake in ICICI Pru, to Premji Invest and a unit of Singapore-based Temasek, for Rs 1,950 crore. The deal valued the life insurance company at Rs 32,500 crore.

Although insurance companies are permitted to list after 10 years of existence, no life insurer has yet gone public. Investment bankers said the decision to increase the foreign investor holding cap from 26 per cent to 49 per cent has been a big trigger for IPOs in the sector. Without the higher cap, foreign investors wouldn’t have been able to participate in the IPO, as foreign partner Prudential Life currently owns 26 per cent.

ICICI Pru's profit was Rs 1,650 crore for 2015-16, compared to Rs 1,634 crore for FY15. Assets under management at end-March were Rs 103,939 crore. New business premium was Rs 6,766 crore for FY16, compared to Rs 5,332 crore in FY15.

Nearly Rs 10,000 crore has been raised through IPOs so far this year in the domestic market. Investor appetite remains strong, say market participants.

Bank of America Merrill Lynch and ICICI Securities are the lead bankers for the ICICI Prudential Life IPO. Besides these two, Deutsche Bank, JM Financial, Citic CLSA, UBS Group, IIFL Holdings, and Edelweiss Financial Services are also working on the issue.