Photographer: Dhiraj Singh/Bloomberg

ICICI Prudential Life’s $904 Million IPO Draws Strong Demand

ICICI Prudential Life Insurance Co. has attracted strong demand for its initial public offering of as much as 60.6 billion rupees ($904 million), as the nation’s biggest such deal in six years drew orders of 10.5 times the amount of stock for sale.

Institutional investors subscribed to about 11.8 times the number of shares reserved for them, while retail investors bid for 1.4 times their stock allocations in Mumbai on the final day of the offer, according to the National Stock Exchange. ICICI Bank Ltd. is selling 181.3 million shares at a range of 300 rupees to 334 rupees each.

The share sale by India’s biggest private-sector life insurer would be the largest IPO in the country since Coal India Ltd. raised 154 billion rupees in 2010, according to data compiled by Bloomberg. It is also the first IPO in the insurance sector since India’s parliament cleared a hurdle last year and increased the size of the stake foreign investors can own in the nation’s insurers to 49 percent from 26 percent.

“Long term money with an investment horizon of at least three years came into this IPO as short-term gains will be limited for subscribers,” Rethish Varma, head of research at Bengaluru-based Aditya Trading Solutions Ltd., said by phone Thursday. “We are bullish on the insurance sector in India in the long term and more insurance IPOs should be happening over next one year or so.”

At present, ICICI Bank holds 67.62 percent of the insurer and Prudential Plc owns 25.87 percent. The South Asian nation has 24 life insurers, 29 non-life insurers and one reinsurer, according to the Insurance Regulatory and Development Authority of India.

Bank of America Corp. and ICICI Securities Ltd. are leading the offering. Citic CLSA Capital Markets Ltd., Deutsche Bank AG, Edelweiss Financial Services Ltd., HSBC Holdings Plc, IIFL Holdings Ltd., JM Financial Ltd., SBI Capital Markets Ltd. and UBS Group AG are also working on the share sale.

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