ICICI Bank to sell 2% stake in ICICI Prudential Life1 min read . Updated: 13 Jun 2018, 08:53 PM IST
ICICI Bank says the stake sale can be through any manner including offer for sale by promoters through stock exchange mechanism
Mumbai: Private sector lender ICICI Bank Wednesday said it will sell up to 2% stake in its life insurance subsidiary ICICI Prudential Life Insurance Ltd. The sale, likely in one or more tranches, will help the bank raise ₹ 1,180 crore.
“The board of directors of the bank today approved the sale of up to 28,711,100 shares, representing up to 2% of the issued and the paid-up equity share capital of ICICI Prudential Life Insurance Co. Ltd," ICICI Bank informed stock exchanges.
The bank said the stake sale can happen through any manner, including offer for sale through the stock exchange mechanism.
ICICI Prudential Life Insurance is a joint venture of ICICI Bank and US-based Prudential Corp. Holdings Ltd.
While ICICI Bank holds 54.88% stake in the insurance company, Prudential holds 25.83% as per the latest data on BSE.
ICICI Prudential became a publicly listed firm in September 2016, when it was valued at ₹ 47,955 crore.
Analysts believe the share sale will enable ICICI Bank to boost its provision coverage ratio (PCR), which is the lowest among large banks. PCR is the proportion of funds that a bank sets aside against bad loans.
ICICI Bank’s PCR excluding technical write-offs stands at 48.4%, compared to Axis Bank’s 52.5% and SBI’s 50.4%. Among the large banks, Bank of Baroda has the highest PCR excluding write-offs at 59%.