Mkt matters: ICICI Lombard IPO subscribed 2.97 times on final day

MUMBAI: The initial public offering (IPO) of general insurance firm ICICI Lombard General Insurance Co Ltd was subscribed 2.97 times on Tuesday, the final day of the share sale, data from stock exchanges showed.

ICICI Lombard is a joint venture between ICICI Bank and Canada’s Fairfax.

As of 6pm, the portion of ICICI Lombard shares reserved for institutional investors was subscribed 8.17 times, while those set aside for non-institutional and retail investors saw subscriptions that were 0.83 and 1.2 times the limit, respectively.

ICICI Lombard has priced its shares in a band of ₹651-661 per share.

The IPO is a pure offer for sale, with ICICI Bank and Fairfax collectively selling around 86.24 million shares.

“There has been strong demand for the ICICI Lombard issuance from institutional investors and retail investors. Almost 38% of the institutional portion of the book has been subscribed to by foreign institutional investors and the rest by domestic institutions. The anchor book too had seen strong foreign participation, with 50-55% of the book being subscribed,” said a person involved in the share sale, requesting anonymity.

On September 14, the company allotted shares worth ₹1,625 crore to institutional investors as part of its anchor book allocation. Institutional investors that participated in the anchor book included BlackRock, Kuwait Investment Authority, Russell Investment Co, Abu Dhabi Invest- ment Authority and SBI Life Insurance.

The anchor book is that portion of an IPO that bankers can allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.

At the upper end of the price band, the share sale will fetch the selling shareholders a total of ₹5,700 crore.

ICICI Bank will get ₹2,099.40 crore selling 31.76 million shares, while Fairfax will get ₹3,601.50 crore for its 54.48 million shares. The ICICI Lombard IPO will see a dilution of a stake of over 19%—7.15% of ICICI Bank’s and 12.27% of Fairfax’s.

Founded in 2001, ICICI Lombard is the first non-life insurer to file for an IPO.

ICICI Lombard offers a range of insurance products such as motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels.

ICICI LOMBARD, THE FIRST NONLIFE INSURER TO FILE FOR AN INITIAL PUBLIC OFFERING, HAS PRICED ITS SHARES IN A BAND OF ₹651661 PER SHARE