Life insurance company ICICI Prudential Life has filed a prospectus for public listing on Monday. It offers to sell 1.81 crore equity shares, which could value up to Rs. 5,000 crore ($745 million).
ICICI Bank, the parent company that holds about 68 percent of the insurance firm, will be the sole partner divesting 12.65 percent of its equity share capital. The entire cash will accrue into the Bank's account. UK's Prudential that holds 26 percent in the life insurer, as the other joint venture partner, will not be selling any stake.
India's first ever insurance IPO comes on the back of India easing rules on foreign investment into the sector during the early part of the year. The country eased the foreign direct limit into insurance company under the automatic rule up to 49 percent in March 2016. Reuters noted that though HDFC Life, SBI Life have also planned for an IPO, the listing move would be restricted to large players and not the smaller ones.
The news agency added that ICICI Pru Life's public listing, scheduled to take place by the end of this calendar year, will also be the biggest in rupee currency since 2010 when government-owned Coal India shares hit the bourses.
HDFC Life's planned IPO for Rs. 3,356 crore ($500 million) was held back as the insurer ventured into an acquisition exercise. A joint venture between India's HDFC Corp. and the U.K's Standard Life Plc, HDFC Life is pursuing merger talks with Max Life Insurance and its parent Max Financial Services. With the latter being a public listed company, HDFC Life's acquisition of it will make it a listed company too.
The merger could pip ICICI Pru Life, as it would see the emergence of the largest private life insurance player in India where there are currently 23 private insurers. With market value of about Rs. 50,000 crore, the merger will be the first among life insurers in more than 10 years.
SBI Life too is planning to announce its intention to go public by March 2017, its chief executive officer had told Reuters in an earlier interview. A joint venture between State Bank of India and BNP Paribas Cardif SA, the life insurer's actual listing may materialise only in the next two years.
India's life insurance industry as of December 2015 is estimated to be worth Rs. 24.82 lakh crore.