ICICI Lombard raises Rs 1625 cr from anchor investors

ICICI Lombard General Insurance Company hit the market with its initial public offer on Friday

ICICI Lombard General Insurance Company hit the market with its initial public offer on Friday

ICICI Bank will get Rs 2,099.40 crore selling 3.17 crore shares, while Fairfax will fetch Rs 3,601.50 crore for its 5.4 crore shares.

The initial public offering of up to 8,62,47,187 equity shares comprises of an offer for sale of up to 3,17,61,478 shares by ICICI Bank and up to 5,44,85,709 shares by FAL Corporation.

The brokerage is positive on ICICIL (ICICI Lombard) for long term as non-life Insurance sector in India provide huge opportunities for growth due to significantly lower penetration and lower insurance density compared to other developed and emerging economies, it said in a note. The investors who acquired shares through anchor allotment include The Nomura Trust, Blackrock India Equities, SBI Life Insurance, Citigroup Global Markets, SBI Life, BNP Paribas Insurance, among others. The merchant bankers have fixed a price-band in the range of Rs 651-661 for the issue. Post-issue, the shareholding of Fairfax will come down to 9.91 per cent, from 21.9 per cent now, while the same for ICICI Bank will be reduced to 55.95 per cent, from 62.95 per cent.

The company sold 24.58 million shares at Rs 661 apiece to Kuwait Investment Authority, Abu Dhabi Investment Authority, a bunch of mutual funds, insurance companies and asset managers.

ICICI Lombard's profit after tax rose 27.01% to Rs 641.82 crore on 35.82% total income to Rs 983.65 crore in the year ended 31 March 2017 over the year ended 31 March 2016. The issue will be open for three days through September 19 (Tuesday). "We recommend all investors to SUBSCRIBE". However, the issue may be a hit because it is the fi first general insurer to list, it said.

Birla Sun Life Insurance Company and Kotak Mahindra Old Mutual Life Insurance Company also invested. Angel Broking, another brokerage, also has "subscribe" rating on ICICI Lombard IPO.

ICICI Lombard announced on Thursday (September 14) that it has raised Rs 1624 crore by allotting shares to institutional investors as part of its anchor book allocation.

Analysts at NVS said, "On the basis of improving macro-economic factors and increasing insurance awareness in India, ICICI Lombard has a huge potential to increase its market share and grow in the nonlife insurance space". They mainly offer fire, engineering, hull, aviation, motor, casualty, health, travel, energy, personal accident, marine, liability, home, rural, and credit insurance products and services. Moreover, the non-life insurance segment is underpenetrated in India and the company's financials are strong. ICICI Lombard being the leader in the sector is well placed to benefit from this trend.

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