ICICI Lombard share sale to value firm at ₹30,000 crore
MUMBAI:General insurance company ICICI Lombard General Insurance Co. Ltd on Friday said it will launch its ₹5,700-crore initial public offering (IPO) on September 15.
ICICI Lombard, founded in 2001, is the first general insurance company to file for a public offering.
The IPO, a pure offer for sale, will see ICICI Bank and Fairfax sell around 86.24 million shares.
The firm also said it has priced its shares in a range of ₹651-661 per share. The initial share sale values the firm at ₹30,000 crore at the upper end of the range.
The IPO valuation is a significant mark up from the ₹20,300 crore in May, at which Fairfax sold a 12.18% stake to a bunch of buyers including private equity firm Warburg Pincus.
The sale fetched Fairfax around $383 million (around ₹2,372.5 crore then).
According to Bhargav Dasgupta, managing director and chief executive of ICICI Lombard, the Warburg transaction and the IPO valuation are based on different metrics.
“The Warburg deal was very different. It was a bilateral deal between two private investors. And that deal was done on a prior year’s numbers, and consummated in 2016-17. Secondly there was no visibility of liquidity at that point of time. So the contours were very different,” said Dasgupta. “The pricing that we have announced is based on market feedback that bankers have got from across the globe,” he explained, adding, “What we believe that people should look at is the opportunity in the space and the franchise that we have been able to create.”
The share sale is a pure secondary offering wherein ICICI Bank is selling 7% stake and Fairfax is selling 12%. The company is not raising any capital for investing in its business. Fairfax will end up with 9.91% stake in the firm post the IPO.
“From our perspective the solvency is at a level that gives us enough headroom for continued growth going ahead. Our solvency is at 2.13 while the regulatory requirement is 1.5. So we have enough headroom to grow from an organic perspective,” said Dasgupta.