ICICI Prudential Life Insurance made a disappointing debut on the stock exchanges, with the shares of the country’s largest life insurer listing at a 1.50% discount to the issue price.
The stock listed at Rs 329 a share on the BSE, compared with the issue price of Rs 334 a share. At 10.30am today, it was down 3.3% trading at Rs 323.15.
The BSE Sensex was up 82 points or 0.3% at 28,374.85.
The 18.13 crore equity issue raised Rs 6,057 crore and was the largest IPO in India since state-run Coal India Ltd raised Rs 15,000 crore in 2010.
ICICI Bank, which held 68% stake in the company offloaded 12.63% in the IPO via offer for sale and so the life insurance arm didn’t get any fresh funding.
ICICI’s foreign joint venture partner Prudential Corp Holdings, which holds 26% stake in ICICI Prudential Life didn’t sell any shares in the offer for sale, but will reduce its stake in the company to 20% by 2019, to enable the company meet Sebi norms, which require all listed company to at least have a 25% public float.
ICICI Prudential IPO was priced in the Rs 300-334 range and was subscribed 10.5 times.
At the upper end of the price band ICICI Prudential is valued at Rs 47,957 crore.
In November 2015, ICICI Bank sold 6% stake in the life insurance arm to Temasek and PremjiInvest, at a valuation of just Rs 32,500 crore. So, in this comparison, the current valuation was 48% higher.
Also, a key risk analysts said was ICICI Prudential was more levered to capital market movements as 82% of new business premiums come from unit linked insurance plans.