ICICI Bank’s board of directors has approved partial stake sale in ICICI Lombard General Insurance Company Limited through an Initial Public Offering (IPO). In a filing with BSE, the bank said ICICI Lombard IPO will be subject to requisite approvals and market conditions.
The size and other details of the IPO would be determined in due course, the statement added. So far, no paperwork has been filed with capital market regulator SEBI. As a result, there is no clarity about the timeline or size of ICICI Lombard IPO, except that ICICI Bank will be participating in the IPO.
ICICI Lombard is the largest private sector non-life insurer in the country. The company is a joint venture between ICICI Bank and Prem Watsa’s Fairfax Financial Holdings which is in the process of diluting its stake to three entities including an affiliate of Warburg Pincus. The other firms are Tamarind Capital, a company owned by the Clermont Group of Singapore and IIFL Special Opportunities Fund, managed by the IndiaInfoline group.
Fairfax Financial Holdings is partially selling its stake in ICICI Lombard as it plans to invest to another insurance company. Current rules bar companies to simultaneously hold more than 10% equity stake in two or more insurance firms. Following the completion of the deal, Fairfax’s stake in ICICI Lombard will come down to 22.1% while ICICI Bank will own about 63.3%. The transaction values ICICI Lombard at INR20,300 crore (INR203 billion).
ICICI Bank and Fairfax recently visited IPO street
Both ICICI Bank and Fairfax have participated in recent IPOs. Last year, ICICI Bank sold its stake through ICICI Prudential Life Insurance IPO which had a muted listing but now trades above IPO price. On the other hand, the IPO of Fairfax’s portfolio company Quess Corp was a big hit.
Evidently, ICICI Lombard IPO will be a closely-watched affair and investors will be looking forward to invest in it.