ICICI Lombard will commence the initial public offer (IPO) of its shares in the market today, and it expects to raise about Rs.5,700 crore from this issue. This marks the first time a non-life insurer in India is issuing shares in the Indian market. Shares are expected to be priced in the range of Rs.651 to Rs.661. Potential shareholders can subscribe to these shares in batches of 22. The issue of ICICI Lombard IPO will commence today and will close on September 19.
ICICI Lombard’s current stakeholders ICICI Bank Ltd and Fairfax Financial Holdings will sell about 86.24 million of their shares through this IPO. By selling these shares, both companies will dilute their overall stake in ICICI Lombard by about 19%. Following the IPO, the overall valuation of ICICI Lombard is expected to go over Rs.30,000 crore.
In India, IPOs are not common in the insurance space. With the initiation of ICICI Lombard IPO, other major players in the market including HDFC Standard Life Insurance, GIC of India, New India Assurance, and SBI Life Insurance are also expected to issue IPOs very soon. The entry of insurance companies into the stock market may also change the way in which mutual funds are allocated. According to experts, about 5 – 7% of mutual fund allocation to financial services will focus on insurance companies from now on.
ICICI Lombard is the second company from the ICICI group to initiate the IPO issue. ICICI Prudential Life Insurance launched its IPO last year and raised about Rs.6,000 crore. This also marked the first public offering of an Indian life insurance company.
ICICI Lombard is one of the leading general insurance companies in India. It offers a range of insurance products in the country through various distribution channels. This IPO signals a new paradigm shift in the insurance market in India.