ICICI Pru Life

ICICI Pru Life OFS comprises sale by Prudential Corporation Holdings Limited (Offer for sell up to an aggregate of 37,330,397 equity shares (representing 2.6% of the equity share capital of the Company) of face value of Rs.10 each of the Company with an option to additionally sell up to 15,937,208 equity shares (representing 1.11% of the equity share capital of the Company)  . The floor price for the Sale shall be Rs. 300 (Rupees three hundred only) per share (the “Floor Price”).

About ICICI Pru Life OFS

Issue Period26-03 and 27-03-2019
Face Value10
Floor Price300
Base Offer (shares)3,73,30,397
Green shoe Option1,59,37,208
Total with GreenShoe (shares)5,32,67,605
Total in Rs. Cr.1,598
Base offer Retail (Shrs)37,33,040
Base offer Retal- Rs. Cr112
Tot  offer Retail (Shrs)5326761
Tot  offer Retail Rs. Cr160
Allocation MethodologyPrice Priority

Updates:

  • ICICI Pru Life OFS Day2: Retail portion allotment likely above Rs. 322, full from 322.05
  • Clearing Price of Rs 321.30 fixed for the Non Retail Bidding in ICICI Prudential Life Insurance Company Ltd.
  • Non retail portion subscribed more than 6x
  • ICICI Pru Life OFS Day1 final : High Demand from Non retail . Allocation may be about Rs. 321.35 against floor price of Rs. 300
  • ICICI Pru Life OFS Day 1: At 1:30 pm base offer .53x, Total offer .37x
  • ICICI Pru Life OFS Day 1: At 2:30 pm Non retail portion, Total Offer : 1.07x at Floor price, 0.57x at Rs. 303.25

OFS Allocation Methodology

  • Retail investor shall mean individual investor who places bids for Sale Shares of total value of not more than Rs. 2,00,000/- (Rupees Two Lacs only) aggregated across the Stock Exchanges (“Retail Investor”).
  • No discount is being offered to Retail Investors.
  • 10% of the Sale Shares shall be reserved for Retail Investors subject to the receipt of valid bids (the “Retail Category”). The Stock Exchanges will decide the quantity of Sale Shares eligible to be considered in the Retail Category, based on the Floor Price.
  • Unsubscribed portion of the Sale Shares reserved for Retail Investors shall be available for allocation to the investors in the Non-Retail category choosing to carry forward their bids to T+l Day and who have not been allotted Sale Shares on T Day. However, such investors are required to indicate their willingness to carry forward the bids to T+ 1 Day.
  • Retail Investors will have an option to place a price bid or bid at “Cut off Price”. Cut-Off Price means the lowest price at which the Sale
  • Shares are sold, as shall be determined based on all valid bids received in Non-Retail category on T Day.
  • Upon determining Cut-Off Price for the Retail Category, the Sale Shares reserved for such category shall be allocated to eligible bids of Retail Investors on price priority method at multiple clearing prices in accordance with the SEBI OFS Circulars. In case of excess demand in the Retail Category at the clearing price/Cut-Off Price, allocation shall be done on a proportionate basis at such clearing price/Cut-Off Price(as the case may be). Bids by Retail Investors below the Cut-Off Price shall be rejected.
  • Settlement shall take place on a trade for trade basis. For bids received from Non-Retail Category on T Day, non-institutional investors and institutional investors who place orders with 100% of the order value deposited upfront, settlement shall take place on a T+I Day. In the case of institutional investors who place bids without depositing 100% of the order value upfront, settlement shall be as per the existing rules for secondary market transactions (i.e., on T+2 Day). For the bids received on T+l Day, from the Retail Category and from the un-allotted non-Retail Investors who choose to carry forward their bid to T+l Day, the settlement shall take place on T+3 Day. In case of non-institutional investors and institutional investors bidding with 100% margin upfront who chose to carry forward their un-allotted bids to T+1 Day, the settlement shall take place<on T+2 Day.
  • The allocation to the non-Retail Investors shall be at price equal to the Cut-off Price or higher as per the bids.

About ICICI Pru Life

  • ICICI Prudential Life Insurance Company Limited (ICICI Prudential Life) is promoted by ICICI Bank Limited and Prudential Corporation Holdings Limited.
  • ICICI Prudential Life began its operations in fiscal year 2001 and has consistently been amongst the top players* in the Indian life insurance sector.
  • As on December 31, 2018, Prudential Corporation Holdings owned 25.82 per cent equity in the private sector insurer.
  • ICICI Pru Life assets Under Management (AUM) as on 31st March 2018 were `1,395.3 billion. 

ICICI Pru Life Share Price Chart & Financial Overview

icici prudential life insurance company price chart

Financial Summary

Market Cap in Rs. Cr46,232
Revenue FY18 in cr 38832
CMP in Rs.322
Face Value10
Price / Earning (PE)37.9
Book Value47
Price / BV6.78
ROCE %28.05%
ROE  %24.43%
Dividend Yield2.08%
Sales 3 yr CAGR4.07%
Debt / Equity Ratio0
52 week High/Low462.00 / 277.95

ICICI Pru Life OFS: Salient points and Assessment

  • Currently Prudential Corporation Holdings owned 25.82 per cent equity in the private sector insurer.
  • Prudential Corporation will sell 2.6 per cent of its stake in the company with an option to sell an additional 1.11 per cent stake.
  • Recently there was stake sale by BNP Paribas Cardif, the joint venture partner in SBI Life Insurance and Standard Life in HDFC Life.
  • ICICI Pru Life posted a decline in net profit in the last two quarters. For Q3FY19, its net profit fell 34.35 per cent to ₹296.77 crore, compared to ₹452.1 crore in the third quarter of last fiscal.
  • ICICI Pru Life has a good return on equity (ROE) track record: ROE 28.25% for last 3 years
  • Company has been maintaining a healthy dividend payout of about 65%
  • ICICI Pru Life runs the risk of risks of a higher tax rate on account of any regulatory changes, in terms of tax rate on life insurance business.
  • In general, life insurance stocks have been under pressure on the bourses, due to their dependence on equity markets.
  • Impending sale by Prudential corporation has been acting as an overhang on ICICI Pru Life stock & may be the main reason for underperformance of the stock price. Also Q2FY19 AND Q3Fy19 performance was not upto the mark.
  • Brokerages estimate ICICI Pru Life NBV to grow 25 percent growth in NBV over FY19-22. New business value (NBV)is the present value of the future profits associated with new business written during the year.
  • ICICI Pru Life is well placed to tap into emerging sizeable protection business opportunity.
  • Cut-off price will be determined based on the bids received on T Day
  • Bidding in OFS opportunities like ICICI Pru Life OFS is my time frustrating for retail investors as big investors change bid price at the last moment. further there is need to pay money upfront and allotment many times is difficult.
  • The floor price at Rs 300 per share which is at a discount of ~ 7% percent to the market price day before but generally adjusts quickly in such cases to 2-4% above the floor price or final discovered cut off price.
  • I intend to apply in ICICI Pru Life OFS on Day 1.
  • Standard disclaimer:  I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.