Prudential Corp. to sell 3.7% stake in ICICI Prudential to comply with SEBI norms

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Prudential Corporation Holdings is reportedly planning to sell about 3.71% of its stake in private life insurance company, ICICI Prudential Life Insurance. The sale will be conducted through an offer for sale (OFS) on Tuesday and Wednesday (26 and 27 March). The company is engaging in this sale to meet the public shareholding norms outlined by the Securities and Exchange Board of India (SEBI).

Prudential Corp

As a part of this sale, Prudential Corp. will offer about 5.32 crore shares for sale in the market. The base price for the share sale is set at Rs.300 per share. This is a 7% discount on ICICI Prudential’s closing price of Rs.322.35 on Monday at BSE. Prudential Corp. is expected to get about Rs.1,598 crore from this sale.

The regulatory filing made by ICICI Prudential indicated that Prudential Corp. will sell 2.6% of its holdings in the company with an option to sell an additional 1.11% of shares. The sale will be opened for non-retailed investors on 26 March and for retail investors on 27 March.

As of now, ICICI Bank holds 52.87% stake in the company whereas Prudential Corp. Holds 25.82% stake. The combined ownership of both firms is currently 78.69%. As per the norms outlined by SEBI, promoters can hold a maximum of 75% shares in a listed company. Through this sale, ICICI Prudential can adhere to the norms outlined by SEBI. Once the sale is over, Prudential’s holdings in the life insurance company will come down to 22.11%.

A similar sale was also witnessed in HDFC Standard Life Insurance when Standard Life sold 5% of its holdings in the company to comply with SEBI norms.

ICICI Prudential Life Insurance started its operations in the year 2001. The company is renowned for its diverse range of life insurance products which include term plans, endowment plans, ULIPs, retirement plans, etc. Though the company has posted a decline in profit during the last two quarters, experts believe that the company has a strong chance at revival and growth.

Source: Economic Times

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