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Mumbai: ICICI Prudential Life Insurance Co. is likely to launch its share sale to raise at least 5,000 crore in the week of 19 September, said three people aware of the development on condition of anonymity.

The company, which filed the initial share sale documents with the Securities and Exchange Board of India (Sebi) on 18 July, received the regulator’s approval on 2 September.

On 29 June, Mint reported that ICICI Prudential could launch its initial public offering (IPO), the first by an insurer in India, in September.

The insurer is a venture between ICICI Bank Ltd and UK’s Prudential Corp. Holdings. As of 31 March, ICICI Bank held a 67.6% stake in the life insurance firm and Prudential Corp. Holdings 25.9%. Singapore’s Temasek Holdings Pte. Ltd and Azim Premji’s investment company PremjiInvest are also shareholders in the company.

“ICICI Prudential is looking at a tentative timeline of third week for the launch, with 20 or 21 September as the likely date. Investor road shows have been going on for the past few weeks and there’s significant demand for the company to go ahead and launch the offer," said one of the three people cited above.

A decision on the price band will be taken in a couple of days, this person added.

“There is a strong appetite for the IPO and the anchor book is already oversubscribed. There are a handful of investors who want to buy stakes worth up to $100 million. The demand from US-based investors is very high," he said.

A second person said the insurer is likely to be valued at between 45,000 crore and 48,000 crore, based on discussions with investors during the roadshows.

The public offer comprises sale of 181.34 million equity shares of ICICI Prudential Life, representing about 12.65% of the equity capital, through an offer for sale by ICICI Bank, according to the draft filing. Prudential will not dilute its stake.

Investment banks ICICI Securities Ltd and Bank of America Merrill Lynch have been hired as the Tier-I banks to manage the share sale.

Bank of America Merrill Lynch declined to comment. ICICI Prudential Life Insurance and ICICI Securities did not respond to emails.

The other banks hired to manage the share sale are CLSA India Pvt. Ltd, Deutsche Equities India Pvt. Ltd, Edelweiss Financial Services Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd, IIFL Holdings Ltd, JM Financial Institutional Securities Ltd, SBI Capital Markets Ltd and UBS Securities India Pvt. Ltd.

In November, ICICI Bank sold 6% stake in the life insurance company in a transaction that valued the insurer at 32,500 crore. Of this, 4% was acquired by billionaire PremjiInvest and its affiliates. The remaining 2% was bought by Compassvale Investments Pte. Ltd, a wholly-owned unit of Temasek Holdings.

The deal was valued at about 1,950 crore.

Other insurance firms are also looking to tap the market.

In May, Business Standard reported that SBI Life Insurance, a joint venture of the State Bank of India and BNP Paribas Cardiff, is likely to sell shares to the public.

On 19 April, the board of Housing Development Finance Corp. Ltd (HDFC) approved a proposal to sell around 10% in HDFC Standard Life Insurance Co. to the public.

In June, HDFC Standard Life, Max Financial Services Ltd and its unit Max Life Insurance Co. Ltd announced merger talks that may lead to the creation of an insurance firm with 1.1 trillion in assets.

The merger will eventually result in the listing of HDFC Standard Life, as Max Financial Services already trades on the Indian exchanges.

The combination of the entities would become India’s largest private sector life insurer, surpassing ICICI Prudential Life Insurance. It will be second only to state-run Life Insurance Corp. of India, which has a 70% share of new business premiums in the country.

As of 31 December 2015, ICICI Prudential Life had assets under management of 1.01 trillion.

The insurance sector has assets under management of 22.4 trillion, of which the share of India’s 23 private sector insurers is only 4.61 trillion, according to the Insurance Regulatory and Development Authority of India. The insurance industry generated 3.28 trillion in premiums last year, of which the private sector’s share was 88,433 crore.

swaraj.d@livemint.com

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