Promoters to dilute 19 per cent stake in ICICI Lombard IPO

Source: The Hitavada      Date: 09 Sep 2017 10:47:14


Sept 8,


LARGEST private sector non-life insurer ICICI Lombard on Friday said promoter entities - ICICI Bank and Farifax Holdings -- will dilute their holdings by close to 19 per cent through a public offer that will hit the markets on September 15 and mop up around Rs 5,700 crore.With the IPO being carried out through offer for sale (OFS) route -- as the company is not issuing any fresh equities - ICICI Lombard will become the first general insurer to go public.

The merchant bankers have fixed a price-band in the range of Rs 651-661 for the issue, which will open for subscription on September 15 and closes on September 19. Through the upcoming IPO, these promoters will dilute up to 86,247,187 equity shares with a face value of Rs 10 each of ICICI Lombard. Post-issue, the shareholding of Fairfax will come down to 9.91 per cent from 21.9 per cent now (11.99 per cent dilution), while ICICI Bank’s will come down by 7 percentage points to 55.95 from 62.95 per cent.“The company is now at a threshold where listing will give a positioning,” Chanda Kochhar, Managing Director and Chief Executive of parent ICICI Bank, told reporters on Friday while launching the IPO roadshow here.  “The proceeds of the issue will add to profitability of the bank,” as the proceeds of the IPO will go to the parent organisations, she added

Commenting on the listing process, Bhargav Dasgupta, Chief Executive of ICICI Lombard, said the company’s combined ratio as of end June was 102.4 per cent and hence there was no immediate requirement of capital.The claim ratio of the company currently stands at 80 per cent, he said, adding, “Around 15-20 per cent growth rate in the overall premium was expected for the industry for the current fiscal.”ICICI Securities, Bank of America Merrill Lynch and IIFL are the bankers to the issue.Issue earlier this week, ICICI Lombard had got the Sebi approval to launch the issue.