Bank of America Merrill Lynch and ICICI Securities have been appointed as lead investment bankers for ICICI Prudential Life IPO. According to sources aware of the development, the life insurance company plans to file draft prospectus with market regulator SEBI by the end of the calendar year and more bankers will be roped in to manage the public issue at a later stage. ICICI Prudential Life Insurance is a joint venture between ICICI Bank and Britain’s Prudential which holds 26% equity stake.
“Bank of America Merrill Lynch and ICICI Securities will start work on the IPO. At a slightly later stage, the company will appoint a few more bankers,” said a source.
Talks of insurance IPOs have again gained momentum as the Insurance Regulatory and Development Authority of India (IRDAI) has indicated it will soon modify guidelines that will facilitate stock market listing of insurance companies. Also, foreign partners are now allowed to own up to 49% in insurance entities, up from the earlier limit of 26%. This has also encouraged companies to go for stock offerings, as most life insurers are partly foreign-owned.
ICICI Prudential Life is one of the two insurance companies which have immediate plans of listing themselves on stock exchanges. The other one is HDFC Standard Life which has also started preparations for the IPO although none has filed prospectus yet. In April, Standard Life increased its shareholding in HDFC Standard Life to 35% by acquiring 9% stake from HDFC. The INR1,705 crore transaction valued HDFC Standard Life at INR18,500 crore.
ICICI Prudential Life IPO to set precedence for others
Several other insurance parents are looking to sell some stake and get their insurance arms listed on the bourses. This list includes SBI Life Insurance, Canara HSBC Oriental Bank of Commerce Life Insurance, Aviva India Life Insurance, and Max Bupa Health Insurance. A good listing of HDFC Standard Life IPO can very well improve sentiments for other IPO candidates.