ICICI Lombard sets IPO price band, looks to raise ~5,700 crore

ICICI Lombard, a joint venture between ICICI Bank and Fairfax Financial Holdings, has set a price band of ~551-661 a share for its initial public offering. ICICI Bank, the holding company of ICICI Lombard General Insurance, has announced its general insurance arm will be open for subscription to the public via an initial public offering (IPO) on September 15. The IPO shall close on September 19.

At the upper end of the price band, the share sale will fetch ~5,700 crore, according to merchant banking sources.

Earlier this week, ICICI Lombard got Sebi's go ahead for the IPO, which would be the first by a general insurer in the country. Two staterun general insurers — General Insurance Corp of India and New India Assurance Company — as also two life insurance firms (SBI Life and HDFC Standard Life) have also lined up IPO plans and are awaiting the Sebi’s approval.

In the Draft Red Herring Prospectus (DRHP) filed with Sebi, the insurer said it would offer 86,247,187 equity shares, at a face value of ~10 per share, representing about 19 per cent of its equity share capital. ICICI Bank, the majority shareholder of ICICI Lombard, will dilute 31,761, 478 of its equity shares, while FAL Corp, a unit the Canada-based Fairfax Financial Holdings, will dilute up to 54,485,709 equity shares.

Around five per cent of the total shares offered for dilution, that is 4,312,359 equity shares, will be reserved for ICICI Bank shareholders.

Earlier, Fairfax had sold 12.18 per cent in ICICI Lombard to private equity firms Warburg Pincus (nine per cent), Clermont Group (1.59 per cent) and IIFL Special Opportunities Fund (1.59 per cent). After the sale, the share ownership in ICICI Lombard of ICICI Bank and Fairfax will be approximately 63 per cent and 22 per cent, respectively.

This is the second insurance company of the ICICI group to list. ICICI Prudential Life insurance, a subsidiary of ICICI Bank, got listed last year. It sold 12.63 per cent stake via an IPO and was valued at ~48,000 crore.