The initial public offering (IPO) of the country's largest private sector non-life insurer ICICI Lombard has hit the primary market and is open for public subscription starting today. The public issue of ICICI Lombard, which plans to mop up around Rs 5,700 crore, will close on 19 September. ICICI Securities, Bank of America Merrill Lynch and IIFL are the bankers to the issue. The merchant bankers have fixed a price-band in the range of Rs 651-661 for the issue.
ICICI Lombard General Insurance is a joint venture between ICICI Bank and Canadian NRI Prem Watsa-promoted Fairfax Financial Holdings.
Here are some of the other details of the insurer's ongoing IPO:
1) The promoter entities - ICICI Bank and Farifax Holdings -- will dilute their holdings by close to 19 percent through the public offer. Post-issue, the shareholding of Fairfax would come down to 9.91 percent from 21.9 percent now, while the same for ICICI Bank would be reduced to 55.95 percent from the current 62.95 percent.
2) ICICI Lombard General Insurance on Thursday raised Rs 1,625 crore from anchor investors. The insurer would allot shares to 64 anchor investors at Rs 661 apiece -- upper end of the IPO price band. The IPO Committee of the companys board finalised allocation of 2.458 crore shares to anchor investors. At the price of Rs 661 per scrip, the total proceeds would be to the tune of Rs 1,625 crore, according to a filing to the stock exchanges.
3) The insurer is looking to raise about Rs 5,700 crore at the higher end of the price band which is fixed between Rs 651-661 per share.
4) For the ICICI Bank group, this is the second public offering this fiscal. Its life insurance arm ICICI Prudential had raised Rs 6,000 crore through an IPO earlier in the current year.
5) ICICI Lombard General Insurance Company is engaged in providing various general insurance products and services in India. They mainly offer fire, engineering, hull, aviation, motor, casualty, health, travel, energy, personal accident, marine, liability, home, rural, and credit insurance products and services. They also provide reinsurance, insurance claims management, and investment management services.
6) On the positive side, ICICI Lombard has a consistent market leadership and demonstrated growth faster than the industry, Arihant Capital Makrets said in its client note. The private general insurer also caters to 618 districts out of 716 districts across India through 249 branches and 20,775 individual agents, besides having partnerships with 5 scheduled banks and tie-ups with 19 other bank partners and access to 6,211 branches, the brokerage firm said.
7) On the flip side, the proceeds from this Offer will be remitted to the Selling Shareholders and ICICI Lombard will not receive any proceeds from the Offer, a concern highlighted by Arihant Capital Markets. Based on qualitative pointers and management quality, the brokerage has a “4 star” rating for the issue.
8) Two state-owned general insurers -- New India Assurance and the re-insurer GIC Re -- are also in the process of going public apart from two life insurers, SBI Life and HDFC Standard Life.
With PTI inputs
Updated Date: Sep 15, 2017 12:35 PM