Temasek, Carmignac Said in Talks for ICICI Insurance Stake

ICICI Bank Ltd., India’s largest private-sector lender, is in talks to sell part of its stake in an insurance unit to Temasek Holdings Pte and Carmignac Gestion for about $300 million, people familiar with the matter said.

The Mumbai-based lender plans to complete an agreement to sell about 5 percent of ICICI Prudential Life Insurance Co. by the end of March, the people said, asking not to be identified as the matter is private. The venture, which is part-owned by Prudential Plc, is India’s biggest private-sector life insurer, according to insurance regulator data.

Singapore’s state investment company and Carmignac, the Paris-based asset manager, are pursuing the purchase after Prime Minister Narendra Modi allowed more foreign investment in the insurance industry last year. ICICI follows Housing Development Finance Corp., the country’s largest mortgage lender, in attracting investors to its insurance venture ahead of planned initial public offerings.

Modi’s move to allow more overseas investment in Indian insurance companies, passed by executive order last year, still needs to be approved by parliament for conversion into a permanent law. The country’s lower house approved the bill this month, and government officials have said they can opt for a joint sitting to push the bill through the upper house where Modi lacks a majority.

Share Sales

There’s no certainty the discussions with ICICI will result in a deal and other investors may still express interest in the stake, according to the people. The bank plans to pursue an initial public offering of the venture after the insurance bill is passed, they said.

Carmignac declined to comment, while ICICI said in an e-mailed statement that the bank doesn’t comment on market speculation. Stephen Forshaw, a spokesman for Temasek, declined to comment.

ICICI dropped 0.3 percent to 332.65 rupees at the close in Mumbai. The bank’s shares have fallen 5.8 percent this year, compared with the 1.8 percent gain in the 12-member S&P BSE Bankex Index.

Carmignac, which was founded in 1989, has about 50 billion euros ($53 billion) of assets under management, according to its website. The French fund manager held a 1.6 percent stake in ICICI Bank at the end of December, exchange filings show.

Software Billionaire

ICICI Prudential Life had a 16.2 percent share of first-year premiums in the twelve months through Dec. 31, making it the country’s biggest private life insurer by that measure ahead of HDFC Standard Life Insurance Co., data from the Insurance Regulatory and Development Authority of India show. ICICI holds 74 percent of its insurance arm, while Prudential owns the rest.

HDFC agreed last year to sell a 0.95 percent stake in its insurance arm to a trust set up by Azim Premji, the billionaire founder of software exporter Wipro Ltd. The deal valued HDFC Standard Life at 210 billion rupees ($3.3 billion), according to data compiled by Bloomberg.

The bank is waiting for lawmakers to approve the insurance bill before deciding on an IPO of the insurance business, HDFC Chief Executive Officer Keki Mistry said Jan. 29.

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