1 min read.Updated: 06 Nov 2020, 08:26 PM IST Written By Anulekha Ray
The NCDs are in the nature of subordinated debt, with a coupon of 6.85% per annum and a tenor of 10 years with a call option at the end of five years, and annually thereafter
ICICI Prudential Life, one of the leading private sector life insurer, on Fridayhas raised ₹1,200 crore of debt capital through a private placement of non-convertible debentures (NCDs). This was the maiden NCD issue by the insurance company.
"Strategy Committee, through its resolution dated November 6, has allotted 12,000 unsecured, rated, listed, redeemable, subordinated, taxable, fully paid-up, non-cumulative NCDs, each bearing a face value of ₹10 lakh aggregating to ₹1,200 crore," the insurer said the regulatory filing.
The private sector insurer has a solvency ratio of 205% as on September 30 against the regulatory requirement of 150%. "This debt capital raise, which is the largest by any insurance company in India, will further increase the resilience and financial strength of the Company and the proceeds shall be utilised in the normal course of the Company’s business activities," ICICI Prudential Life said.
The NCDs are in the nature of subordinated debt, with a coupon of 6.85% per annum and a tenor of 10 years with a call option at the end of five years, and annually thereafter. The subordinated debt instrument carries AAA ratings from both Crisil and Icra. The NCDs will be listed on the wholesale debt market of the NSE.
NS Kannan, the managing director and chief executive said, "We are delighted with the market response to our maiden subordinated debt capital raise through NCDs. The issue was tightly priced at a coupon rate of 6.85 per cent per annum".
"While our solvency ratio is already at 205, we have proactively used the opportunity offered by benign debt market conditions for the benefit of all our stakeholders," he added.