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ICICI Prudential Life makes tepid debut on bourses, lists at R330

by September 30, 2016 General

ICICI Prudential Life Insurance’s debut on the bourses on Thursday turned out to be a tepid affair after the markets fell sharply on the back of geopolitical concerns. The government said on Thursday that the Army had carried out “surgical strikes” Wednesday night on terror launch pads across the Line of Control.

While the stock listed at R330 apiece — slightly below the issue price of R334 — it ended the session at R297.65 apiece, down nearly 11% over the issue price. Market analysts pointed out the life insurer which mopped up R6,057 crore , via the initial public offering ( IPO), had priced its shares somewhat aggressively not leaving enough on the table for investors.

The IPO was priced in the range of R300-R334 per share and had been subscribed 10.43 times with investors bidding for 138 crore shares of the total 13.23 crore shares on offer. Post listing, the stock commands a market capitalisation of R42,722.42 crore. The IPO was entirely an offer for sale (OFS) of 18.1 crore equity shares of face value of R10 each by ICICI Bank.

Qualified institutional buyers (QIBs) bid for 38.62 crore shares of the total 3.2 crore shares on offer, 11.83 times their quota. High-net-worth individuals (HNIs) bid for 69.89 crore shares of the 2.44 crore shares reserved for them, or 28.55 times the quota. Retail investors bid for nearly 1.3 times of their quota, or 7.44 crore shares of the 5.71 crore shares reserved for them. The issue had reserved 1.81 crore shares for shareholders of ICICI Bank, these shareholders bid for 22.13 crore shares or 12.2 times of their quota.

On August 16, the company raised R1,635.33 crore by allotting 4.89 crore shares to anchor investors at a price of R334 a share. Among the investors who were allotted shares in the pre-IPO placement include the government of Singapore, Nomura India Investment Fund Mother Fund, Goldman Sachs (Singapore), Morgan Stanley Mauritius Company and Tata Balanced Fund, among others.

For the year ending March 2016, the company reported an 8% increase in its total income at R1,812.2 crore. During the same period, profit after tax was up almost 460% at R249.9 crore from the previous year’s R44.6 crore.

On Thursday shares of ICICI Bank closed at R251.00, down 3.76% on BSE.