ICICI Lombard IPO on 15 Sep, to value insurer at Rs30,000 crore
The ICICI Lombard IPO valuation is a significant mark up from the Rs20,300 crore in May, at which Fairfax sold a 12.18% stake to a bunch of buyers including Warburg Pincus
Mumbai: General insurance company ICICI Lombard General Insurance Co. Ltd on Friday said it will launch its Rs5,700-crore initial public offering (IPO) on 15 September.
ICICI Lombard, founded in 2001, is the first general insurance company to file for a public offering. The IPO, a pure offer for sale, will see ICICI Bank and Fairfax sell around 86.24 million shares.
The firm also said it has priced its shares in a range of Rs651-661 per share. The initial share sale values the firm at Rs30,000 crore at the upper end of the range.
The IPO valuation is a significant mark up from the Rs20,300 crore in May, at which Fairfax sold a 12.18% stake to a bunch of buyers including private equity firm Warburg Pincus. The sale fetched Fairfax around $383 million (around Rs2,372.5 crore then).
According to Bhargav Dasgupta, managing director and chief executive of ICICI Lombard, the Warburg transaction and the IPO valuation are based on different metrics.
“The Warburg deal was very different. It was a bilateral deal between two private investors. And that deal was done on a prior year’s numbers, and consummated in 2016-17. Secondly there was no visibility of liquidity at that point of time. So the contours were very different,” said Dasgupta. “The pricing that we have announced is based on market feedback that bankers have got from across the globe,” he explained, adding, “What we believe that people should look at is the opportunity in the space and the franchise that we have been able to create.”
The share sale is a pure secondary offering wherein ICICI Bank is selling 7% stake and Fairfax is selling 12%. The company is not raising any capital for investing in its business. Fairfax will end up with 9.91% stake in the company post the IPO.
“From our perspective the solvency is at a level that gives us enough headroom for continued growth going ahead. Our solvency is at 2.13 while the regulatory requirement is 1.5. So we have enough headroom to grow from an organic perspective,” said Dasgupta. The insurer has appointed Bank of America Merrill Lynch, ICICI Securities Ltd, IIFL Holdings Ltd, CLSA India Pvt. Ltd, Edelweiss Financial Services and JM Financial Institutional Securities Ltd to manage the share sale.
ICICI Lombard offers a range of insurance products such as motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels.
ICICI Lombard General Insurance is the second insurance company from the ICICI group to go public. Last year, ICICI Prudential Life Insurance Co. Ltd raised Rs6,000 crore in an initial share sale, the first public offering by an Indian life insurer. ICICI Bank sold a 12.63% stake through the IPO, which valued the life insurer at around Rs48,000 crore.
Several insurance companies, including state-owned ones, are queuing up to launch IPOs.
Insurance companies that have filed their draft IPO prospectus with markets regulator Securities and Exchange Board of India (Sebi) include SBI Life Insurance Co. Ltd, HDFC Standard Life Insurance Co. Ltd, General Insurance Corp. of India and New India Assurance Co. Ltd.
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