ICICI  Lombard Files for IPO

ICICI Lombard General Insurance Co. Ltd, the non-life insurance joint venture of ICICI Bank Ltd and Fairfax Financial Holdings Ltd, on Friday filed the draft red herring prospectus for its initial public offering (IPO). ICICI Lombard, founded in 2001, is the first non-life 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 share sale will see a dilution of over 19% stake. ICICI Bank is selling 7.15% stake, while Fairfax is selling 12.27%. Mint had reportedon Wednesday that the duo were looking to sell around 20% stake through the IPO. In May, Fairfax sold 12.18% stake in ICICI Lombard to a bunch of buyers including private equity firm Warburg Pincus Llc for around $383 million (around Rs2,372.5 crore then). The transaction valued the firm at Rs20,300 crore.

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.In fiscal 2017, the insurer issued 17.7 million policies and had a gross direct premium income of Rs. 10,725 crore. As of 31 March, it had Rs. 15,079 crore in total investment assets. 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 Rs. 6,000 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. In April, Mint reported that New India Assurance Co. Ltd and General Insurance Corp. of India Ltd (GIC) had hired investment banks to manage their IPOs as the government seeks to pare its stake in the state-run insurers.The government is likely to raise more than Rs10,000 crore by selling its shares through the public offerings. State Bank of India’s life insurance unit SBI Life Insurance Co. Ltd is planning to go public. Reliance General Insurance Ltd, the non-life insurance arm of Reliance Capital, is also planning to list, the company said last month.