ICICI Bank shares surged on Monday after its insurance arm ICICI Prudential Life Insurance hit the markets with its Rs 6,000 crore initial public offering (IPO). The IPO was subscribed 16 per cent till 5 pm and received bids for 2,08,93,356 shares against 13,23,78,973 shares offered by the company. The IPO is the biggest after Coal India that hit the capital markets on Oct 18, 2010 to raise over Rs 15,000 crore. Price band of Rs 330-334 per equity shares has been fixed for the offer and the issue will close on September 21.
Reacting to the news, ICICI Bank shares were trading 1.70 per cent up at Rs 272.10 at 1.07 pm. The scrip opened at Rs 269 and touched a high and low of Rs 272.60 and Rs 268.10, respectively. Later, the scrip ended 1.61 per cent up at Rs 271.85.
ICICI Bank owns 68 per cent in ICICI Prudential Life, while 26 per cent is owned by Prudential Corporation, UK and 4 per cent by Hasham Traders (Azim Premji), and the rest by other institutional investors and employees.
According to Prabhudas Lilladher, ICICI Prudential Life’s overall market share, on retail weighted received premium basis (RWRP) was 11.3 per cent and among the private life insurance companies, IPLIC commanded a 21.9 per cent market share in In FY16. The brokerage house has a subscribe rating on the IPO. “The company is riding on ULIP business (82% mix) which has lower regulatory risk, lower capital requirement and long term opex benefit, but also has lower margins and is highly dependent on capital market performance. Company from here on is focusing to improve it protection business share which is high margin and moderate opex,” the brokerage house said.