Fairfax offloads 4.9% stake in ICICI Lombard for ~2,627 cr

Prem Watsa’s Fairfax on Thursday sold 4.91 per cent stake in ICICI Lombard General Insurance Company, exiting the firm it co-founded with ICICI Bank in 2001.

FAL Corporation, a subsidiary of Canada-based Fairfax, sold 22 million shares at ~1,178 apiece via block deals, the data provided by stock exchanges showed. The company has mopped up ~2,627 crore through the stake sale. The stake was bought by a clutch of buyers whose names couldn’t be ascertained.

This comes after the insurance regulator relaxed the five-year lock-in rule for Fairfax’s stake in ICICI Lombard, which was scheduled to end in March 2021. Watsa has also invested in digital general insurance player Digit General Insurance. Shares of ICICI Lombard fell nearly 5 per cent in the secondary market to end at ~1,207 because of poor performance of the company in September.

The total premium collection for ICICI Lombard in September fell 23 per cent. Also, in the first half of 2019-20, the company’s premium collection contracted 11 per cent, compared to the same period last year.

On September 27, Fairfax had sold nearly 5 per cent stake in ICICI Lombard for ~2,562 crore. Back then, L&T Mutual Fund (MF), SBI MF, ICICI Prudential MF, and Aditya Birla Sun Life MF were among the buyers.

ICICI Lombard was set up in 2001, a 64:36 joint venture (JV) between ICICI Bank and Fairfax. The latter has reduced its stake in the JV over the years. When ICICI Lombard came out with an initial public offering in September 2017, Fairfax had sold its 12 per cent stake, while ICICI Bank had sold nearly 7 per cent.

Shares of ICICI Lombard have more than doubled since its listing. Currently, ICICI Bank holds 55.86 per cent in the general insurer.

Currently, Fairfax has investment in other Indian companies, including Thomas Cook India, Quess Corp, India Infoline, and Catholic Syrian Bank. The firm has proposed to invest billions of dollars more in India over the next five years.