ICICI Lombard General Insurance Company, the largest private sector non-life insurer in India, is planning to raise around Rs 5,700 crore from its initial public offering (IPO). The company has set a price band of Rs 651-661 per share for its IPO and when calculated at the upper band of the issue price the company will be valued at Rs 30,000 crore.
The IPO is scheduled to open on September 15 and September 19. Anchor Investors will be allotted shares on September 14. The offer constitutes 19% of the post offer equity share capital, which will include 7% by ICICI Bank and 12% by Fairfax Financial Holding. ICICI Bank will get Rs 2,099.40 crore selling 3.17 crore shares, while Fairfax will fetch Rs 3,601.50 crore for its 5.4 crore shares. The company has reserved 43.12 lakh shares for ICICI Bank shareholders. Bids can be made for a minimum of 22 equity shares and multiples of 22 thereof.
Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance said, “We believe that we have reached the scale where it is appropriate to list. More specifically this is OFS and one of our shareholder has to bring their shareholding down to below 10%, so that was one of the triggers. But even other wise at a company level we believe we have reached certain scale and size where it is appropriate to be a listed entity.” This issue is a pure offer for sale (OFS) and the Company will not receive any proceeds.
ICICI Lombard General Insurance is having an market share of 10.05% in the non life insurance industry as on July 2017, shows the data from Insurance Regulatory and Development Authority of India (Irdai). In FY 17 the company issued approximately 1.77 crore policies and their gross direct premium was Rs 10,725 crore. For the three months ended June 2017, the company issued 52 lakh policies and their gross direct premium income was Rs 3,321 crore.
Senior officials at the company said that, post IPO ICICI Bank will be holding 56%, Fairfax will continue to hold little less than 10%, Warburg Pincus will hold roughly about 9%, public float will be 19% and couple of other investors will have remaining stake in the general insurance company. “Clearly there is no plan for any foreign partner because we believe that, as a company we have capabilities and understanding skills to run this business without input from foreign shareholders. As regards to Fairfax, we believe that they see value in this business and they want to continue hold as much as they can and there is no plan from us to do any buyback from them,” added Dasgupta.
On May 27 this year, ICICI Lombard had announced that Fairfax Financial Holding had sold 12.18% of its stake in the company to private equity firms Warburg Pincus, Clermont Group and IIFL Special Opportunities Fund and the stake sale valued the company at Rs 20,300 crore.
In 2017, companies raised Rs 16,254 crore through IPOs. Listing gains and returns by newly listed companies as also the positive sentiment in the broader market are among the reasons attributed to the trend. BSE, HUDCO, CDSL, Avenue Supermarts, Shankara Building Products, S Chand and Company, and Cochin Shipyard are some of the companies who completed their IPOs in the last eight months. The newly listed companies have given good returns to investors, the BSE IPO index a gauge of newly listed companies rose by 44.6 % year to date, against Sensex’s gain of 19% during the same period.