Life Insurance company IndiaFirst Life Insurance has received approval from SEBI to float Initial Public Offering (IPO) to raise funds. The IPO comprises a fresh issue of up to Rs 500 crore along with an offer for sale (OFS) of up to 14,12,99,422 equity shares by the promoters and existing shareholders of the company.
The insurance company is owned by two of India’s largest PSU banks, Bank of Baroda and Union Bank of India. Bank of Baroda holds a 65 percent stake in the company.
Additionally, Warburg Pincus affiliate Carmel Point Investments India bought a stake in the life insurance firm. It holds 26 percent stake in the company, followed by Union Bank with 9 percent stake.
In a statement, the company said that Bank of Baroda will sell 8,90,15,734 equity shares, whereas Union Bank of India will sell 1,30,56,415 equity shares in the OFS. Carmel Point Investments India would offload 3,92,27,273 equity shares during the primary stake sale.
The firm may consider a private placement on a preferential basis or a rights issue aggregating up to Rs 100 crore. If such a placement is completed, the fresh issue size will be reduced.
The net proceeds from the fresh issuance worth Rs 500 crore will be used towards augmentation of its capital base to support solvency levels.
In October last year, the company filed preliminary IPO papers with SEBI, and obtained the observation letter on March 15, as per an update with the Securities and Exchange Board of India (Sebi) on Tuesday.
In Sebi’s parlance, obtaining an observation letter means its go-ahead to float the IPO.
IndiaFirst Life is supported by an extensive bancassurance network provided by Bank of Baroda and Union Bank, two of India’s biggest public sector banks.
ICICI Securities, Ambit, BNP Paribas, BOB Capital Markets, HSBC Securities and Capital Markets (India), Jefferies India and JM Financial are the book-running lead managers to the issue. The equity shares will be listed on the BSE and NSE.
