IndiaFirst Life Insurance received approval for an initial public offering from the capital markets regulator Sebi in March last year and aims to float the issue by March. The company is meeting investors to gauge the market sentiment.
Life insurers are becoming a hard sell after the withdrawal of several tax benefits and the poor post-listing show by the biggest player, the state-owned Life Insurance Corporation.
Promoters Bank of Baroda and Union Bank of India are likely to sell a part of their holdings in the IPO.
“It has received final observations from Sebi in March 2023,” said a source. “IndiaFirst’s public issue can be floated by March 15 this year. If the company does not list now,it will have to file a fresh DRHP with updated financials.”
The two private sector insurers HDFC Life and SBI Life were listed on the stock exchanges in 2017. State-run LIC was listed in 2022, but the current market price is yet to reach the issue price of ₹949.
IndiaFirst’s issue will consist of a fresh equity share offering of ₹500 crore and an offer for sale of up to 1.4 billion equity shares.ICICI Securities, Jefferies, Ambit, BNP Paribas, HSBC Securities, JM Financial, and BOB Capital are the book-running lead managers.
Bank of Baroda, with a 65% stake, plans to offload 10%. Warburg Pincus arm Carmel Point Investment which holds a 26% stake plans to sell 39 million shares, while Union Bank of India plans to sell 30 million shares, according to the draft red herring prospectus (DRHP). The funds raised will be used to increase the company’s capital base and enhance its solvency level, which stands at 2.25 times.
Bank of Baroda is expected to retain majority ownership at over 51% after the IPO.
The company’s value of new business (VNB) and VNB margins have shown positive trends, driven by a shift in the new business mix toward retail and higher-margin non-participatory products.