After the successful listing of the first private sector lender bank, RBL Bank Ltd., ICICI Prudential Life Insurance Company Ltd. is the first insurance company to go public in last couple of years. ICICI Prudential Life Insurance Company Ltd. is coming with an initial public offer which will hit the primary market on 19 September 2016. The company aims to raise Rs.6,057 Crore by offering shares at Rs.300 to Rs.334 per Equity Share. This is the second largest issue to hit Indian market, the largest being Coal India which was of Rs 15,000 crore.
ICICI Prudential Life Insurance Company Limited was incorporated at Mumbai on July 20, 2000. ICICI Prudential Life Insurance Company Ltd. is a joint venture between largest private bank in India, ICICI Bank and UK’s Prudential Corporation Holdings. ICICI holds 68% stake while Prudential have 22% stake in the company. They offer their customers a range of life insurance, health insurance and pension products and services.
They offer a range of products to cater to the specific needs of customers in different life stages, enabling them to meet their long-term savings and protection needs. They offer their customers access to products and services through an extensive multi-channel sales network across India, including through the branches of their bank partners, individual agents, corporate agents etc.
They believe that they are at the forefront of leveraging technology in the Indian life insurance sector, with their focus on digitisation and transformation of sales, customer on-boarding and internal processes. Company has 121,016 individual agents and their bank partners had over 4,500 branches.
The Company also has a wholly owned subsidiary, ICICI Prudential Pension Funds Management Company Limited, which is registered as a fund manager with the Pensions Fund Regulatory and Development Authority of India.
Among all insurance companies in India (public and private sector), company has 11.3% market share on a retail weighted received premium basis. Company has a market share of 21.9% on a retail weighted received premium basis in India, among the 23 private sector life insurance companies in India. So in simple words, they are the largest private sector insurance company in India.
Objects of the Issue:
The objects of the Offer are :-
- To achieve the benefits of listing the Equity Shares of the Company on the Stock Exchanges.
- To carry out the sale of up to 181,341,058 Equity Shares by the Selling Shareholder.
The allotment status of the issue is expected to be completed by Sep 27. You can check your allotment status for ICICI Pru here.
The issue is expected to start trading from Sep 29.
Some of the qualitative factors which form the basis for computing the Offer Price are:
- Consistent leadership across cycles;
- Ability to deliver superior customer value;
- Diversified multi-channel distribution network for our products and services;
- Leveraging technology;
- Robust and sustainable business model of our business;
- Strong and established brand of our shareholders, “ICICI Bank” and “Prudential”; and
- Experienced senior management team.
ICICI Pru Products:-
- Retail Products: – They sell four principal categories of retail products to their individual customers – unit-linked, participating, pure protection and non-participating. In all products other than pure protection, they offer a combination of savings and protection features.
- Group Insurance: – They offer group insurance products to employers to cover their employees, to banks, non-banking finance companies and micro-finance institutions to cover their customers, and to other professional and informal groups to cover their members.
- Pension Fund Management: – ICICI Prudential Pension Fund Management Company, is licensed by the Pension Funds Regulatory and Development Authority (the “PFRDA”) as a pension fund manager under the National Pension System and had 01 billion in assets under management.
- Sales and Marketing:- They employ a multi-channel approach to market and sell their products, which has helped them establish an extensive and effective distribution network across India
- Direct Sales: – They have a dedicated team of sales employees to market their insurance products directly to customers.
- Group Sales: – The group sales channel is a proprietary channel under which company’s employees directly solicit business from corporations to satisfy the employee benefit needs.
- Information Technology and Digitisation: – Important operational and management areas that rely upon information technology include, product development, underwriting and claims settlement, sales support and distribution channel management, customer services, investment management, actuarial and financial management, business analytics and risk management.
ICICI Prudential Life has a networth of approximately Rs 5,320 crore. Its total revenue has risen at a compounded annual growth rate (CAGR) of 8 percent to Rs 18,998.7 crore in financial year 2015-16. Net profit stood at Rs 1,652.72 crore, growing at a CAGR of 4.5 percent, the company said in its DRHP.
This is first of a kind issue in India. Only competitor which already trades in the market in Max which is much smaller than ICICI pru. We will be updating ratio for ICICI prudential in the coming days.
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