Published: Wed, September 21, 2016
Economy | By Melissa Porter

ICICI Pru's mega IPO subscribed 16% on Day 1

ICICI Pru's mega IPO subscribed 16% on Day 1

ICICI Bank is going to trim 12.63 per cent stake and raise about Rs 6056 crore through ICICI Prudential Life's IPO with price band of Rs 330- Rs 334 per share. The IPO, first by any life insurance company in India, will raise Rs 6,057 crore which is the biggest for Indian markets in about six years.

During the three days of offering (September 19-21), the IPO would be offered in a price band of Rs 300-334 per share.

"If were an investor in ICICI Prudential Life, I do not think I would put my money for listing gainS because what you are buying is a very strong company and not a stock which is under priced".

Does this mean that investors should give the IPO a pass?

The Rs 6,057 crore IPO attracted about Rs 700 crore worth of subscription, which along with shares worth Rs 1,635 crore already allocated to anchor investors, has taken the total collected amount to Rs 2,332 crore. They should also be aware of the potential for volatility as the ULIP business may be impacted by the ups and downs of the capital markets. Last November, ICICI Bank sold almost six per cent stake in ICICI Prudential to Temasek and PremjiInvest.

Data compiled from BSE and NSE showed, 15.73 per cent of the issue size of 13.23 crore shares was subscribed by 5 pm IST.

The public offer comprises of up to 18,13,41,058 equity shares of ICICI Prudential Life Insurance Company, including a reservation of up to 1,81,34,105 equity shares (10% of the offer) for the shareholders of ICICI Bank.

The rest is held by others, including billionaire investor Azim Premji's firm M/s Hasham Traders (4%) and Compassive Investment Pte.

Also read: Is ICICI Prudential IPO a precursor to more insurance floats? .

Investment banks ICICI Securities Ltd and Bank of America Merrill Lynch have been hired as the tier-I banks to manage the share sale.

ICICI Prudential Life began operations in 2001.

CLSA India, Deutsche Equities India, Edelweiss Financial Services, HSBC Securities and Capital Markets (India), IIFL Holdings, JM Financial Institutional Securities, SBI Capital Markets and UBS Securities India are the book running lead managers to the issue. Its net profit for FY16 stood at Rs.1,652.72 crore compared with Rs.1,640.35 crore in the year prior, as per the prospectus.

ICICI Prudential Life Insurance is the largest private sector life insurer by total premium and assets under management (AUMs) as of 31 March 2016.

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