Mumbai: The initial public offering (IPO) of general insurance firm ICICI Lombard General Insurance Co. Ltd was subscribed 2.97 times on Tuesday, the final day of the share sale, data from stock exchanges showed.
ICICI Lombard is a joint venture between ICICI Bank and Canada’s Fairfax.
As of 6pm, the portion of ICICI Lombard shares reserved for institutional investors was subscribed 8.17 times, while those set aside for non-institutional and retail investors saw subscriptions that were 0.83 and 1.2 times the limit, respectively.
ICICI Lombard has priced its shares in a band of Rs651-661 per share. The IPO is a pure offer for sale, with ICICI Bank and Fairfax collectively selling around 86.24 million shares.
“There has been strong demand for the ICICI Lombard issuance from institutional investors and retail investors. Almost 38% of the institutional portion of the book has been subscribed to by foreign institutional investors and the rest by domestic institutions. The anchor book too had seen strong foreign participation, with almost 50-55% of the book being subscribed by them,” said a person involved in the share sale, requesting anonymity.
On 14 September, the company allotted shares worth Rs1,625 crore to institutional investors as part of its anchor book allocation. Institutional investors that participated in the anchor book included BlackRock, Kuwait Investment Authority, Russell Investment Co., Abu Dhabi Investment Authority and SBI Life Insurance.
The anchor book is that portion of an IPO that bankers can allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.
At the upper end of the price band, the share sale will fetch the selling shareholders a total of Rs5,700 crore. ICICI Bank will get Rs2,099.40 crore selling 31.76 million shares, while Fairfax will get Rs3,601.50 crore for its 54.48 million shares. The ICICI Lombard IPO will see a dilution of over 19% stake—7.15% of ICICI Bank and 12.27% of Fairfax.
Founded in 2001, ICICI Lombard is the first non-life insurance company to file for an IPO. 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 that was 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.
Last week, SBI Life Insurance Co. Ltd, a joint venture between India’s largest lender State Bank of India and BNP Paribas Cardif said it would launch its Rs8,400 crore IPO on 20 September. SBI Life Insurance will be the second life insurer to go public.
sneh.s@livemint.com