ICICI Bank, which is launching an IPO of ICICI Prudential Life next week, has said that post-issue the two promoters will offload additional 6 per cent stake in the life insurance JV over the next three years.
Through the Rs 6,000-crore public float, beginning September 19, the promoters of ICICI Prudential Life Insurance — ICICI Bank and Prudential Corporation Holdings — will offload a little over 12 per cent and an additional 7 per cent by other shareholders through the IPO.
But to meet the 25 per cent minimum public float, the promoters will offload another 6 per cent of equity over the next three years.
“With this IPO, about 19 per cent of stock will be open stock, and we have three years to increase it to 25 per cent.
Our understanding currently between the two shareholders is that ultimate shareholding we have to finally arrive at 25 per cent.
“It would be around 54 per cent for ICICI Bank and 20 per cent for Prudential Corporation Holdings,” ICICI Bank managing director and chief executive Chanda Kochhar has said.
As per the revised terms of the JV agreement and the DRHP, ICICI Bank and Prudential have agreed to offload their stakes in ICICI Prudential to achieve 54 per cent and 20 per cent, respectively.
The country’s largest private life insurer has fixed a price band of Rs 300-334 a share to raise around Rs 6,000 crore.
The ICICI Pru IPO is the largest initial public offer after the Rs 15,000-crore Coal India issue in October 2010.
The NPAs-saddled ICICI Bank, which will be diluting over 12 per cent of its stake in ICICI Prudential, is looking to benefit through non-core asset sale, Kochhar said, adding the lender will continue to offload stakes in subsidiaries.
The issue involves an offer of up to 18,13,41,058 equity shares of a face value of Rs 10 each by its shareholders through an offer for sale. At the lower price band of Rs 300, the company will garner funds little over Rs 5,400 crore, while at the upper price band the amount comes to the tune of over Rs 6,000 crore.
In 2015-16, ICICI Pru Life total premium stood at Rs 19,164 crore, the persistency ratio of the company was 82.4 per cent, the highest in the sector, AUM was at Rs 1.09 trillion. The total expenses of the entity is one of the lowest at 14.6 per cent.
The overall market share of the company was 11.3 per cent on retail weighted received premium in FY16.