ICICI Prudential Life IPO was subscribed 52 per cent on the second day of offer till 5 pm. The public offer received bids for 6,87,85,068 shares against 13,23,78,973 shares offered by the company, data available with the NSE showed. The company has fixed a price band of Rs 300-344 per share for the IPO and it will close on Wednesday (September 21).
At the upper price band of Rs 344, the ICICI Prudential Life Insurance will raise around Rs 6,057 crore. This is the biggest initial public offering after Coal India. The state-run company had hit the capital markets in 2010 to raise over Rs 15,000 crore.
ICICI Prudential is a joint venture between the private sector lender ICICI Bank and UK’s Prudential Corporation Holdings. Singapore’s Temasek and PremjiInvest also are shareholders. ICICI Bank has around 68 per cent stake in the insurer, while Prudential has 26 per cent. PremjiInvest holds 4 per cent stake in the ICIC Prudential while Temasek owns 2 per cent in the firm.
DSP Merrill Lynch and ICICI Securities are global coordinators and book running lead managers to the issue. Others are CLSA, Deutsche, Edelweiss, HSBC, IIFL, JM Financial, SBI Capital Markets and UBS.
Brokerage firm Geojit BNP Paribas Financial Services has given ‘Subscribe’ rating to the issue. In a research report, Geojit BNP Paribas said, “ICICI Prudential Life had an embedded value (EV) of Rs 13,940 crore as of FY16 with RoEV of 15.3%. (EV is a common valuation measure in the insurance industry which measures potential future profits from existing business.) At the upper price band of Rs 334 per share, the IPO is priced at 3.4 times FY16 P/EV which is favourable as compared to the valuation of recent insurance deal between HDFC Life and Max Life. The transaction valued HDFC Life at 4.5 times FY16 P/EV and Max Life at 3.7 times. Hence, we believe that valuation is reasonable and we recommend ‘Subscribe’ to the issue, with a medium-to-long term perspective.”