Thursday 02 / May / 2024
Mumbai: Canadian billionaire Prem Watsa's Fairfax Financial Holdings on Saturday sold 12.18 per cent of its stake in general insurance ICICI Lombard General Insurance to private equity firms Warburg Pincus, Clermont Group and IIFL Special Opportunities Fund, the company said in a statement.
ICICI Lombard is a joint venture between ICICI Bank and Fairfax Financial Holdings. The company reported a gross written premium of Rs8,307 crore (Rs83.07 billion) for the year ended on March 31, 2015. It issued over 15.80 million policies and settled over 1.62 million claims as of 31 March 2016.
The stake sale valued the general insurance company at Rs20,300 crore (Rs203 billion), the statement said, which would mean that Fairfax fetched Rs2,372.5 crore (Rs23.72 billion)) from the sale.
Red Bloom Investment, a company owned by private equity funds managed by Warburg Pincus, bought 9 per cent stake in the sale, while Tamarind Capital, a company owned by Singapore-based private investment group Clermont Group and IIFL Special Opportunities Fund, a fund managed by IIFL Asset Management, both bought 1.59 per cent each, the statement said.
The transaction is subject to governmental and regulatory approvals. ICICI Securities acted as the financial advisor for the stake sale.
Upon completion of the transaction, ICICI Bank Limited and Fairfax will have approximately 63 per cent and 22 per cent share ownership in ICICI Lombard, respectively.
Mint reported in March that global private equity firms including The Carlyle Group, Warburg Pincus and Advent International had evinced interest in acquiring the almost 35 per cent stake in ICICI Lombard General Insurance held by Fairfax Financial Holdings.
The move comes ahead of the insurance company's plans to go public.
On 23 May, CNBCTV18 reported that ICICI Lombard is planning to file draft initial public offering (IPO) papers by the last quarter of the current financial year.
ICICI Lombard will be the second insurance venture of ICICI Bank to go public. Last year, its life insurance joint venture ICICI Prudential Life Insurance Co. went public in an IPO worth Rs6,000 crore (Rs60 billion).
ICICI Lombard's public listing plans come at a time when a slew of insurance companies are planning to go public.
In April, Mint reported that state-owned New India Assurance (NIA) and General Insurance Corp. of India Ltd (GIC) have hired investment banks to manage their initial public offerings (IPOs) as the government seeks to pare its stake in the state-run insurers as part of its ambitious divestment plan to raise Rs72,500 crore (Rs725 billion) this fiscal.
The government is likely to raise more than Rs10,000 crore (Rs100 billion) by selling these shares, Mint had reported.
India's largest bank, the State Bank of India (SBI) too is preparing its life insurance venture SBI Life Insurance for a public listing.
On 12 May, IFR, a Thomson Reuters publication, reported that the company had appointed eight investment banks to manage the insurance company's IPO, which could be worth almost $1 billion.
The company has appointed Citigroup, Deutsche Bank, BNP Paribas, Axis Capital, ICICI Securities, JM Financial and SBI Capital Markets to manage the share sale, IFR reported.
SBI Life plans to offer a 12 per cent stake in the IPO, of which SBI will sell 8 per cent and BNP Paribas Cardif will sell 4 per cent. SBI owns 70.1 per cent of SBI Life, while BNP Paribas Cardif owns 26 per cent.
