Employees Of ICICI Prudential Life Insurance Rush To Offload Stock Options Ahead Of IPO
Off-market trades in ICICI Prudential Life values the company at over Rs 46,000 crore.
Employees and non-promoter shareholders of ICICI Prudential Life Insurance Company Ltd. are selling their shares in off-market transactions ahead of the initial public offer which is expected by the third week of September, said a market participant who is involved in the transaction of these shares.
The Transactions
Shares are being traded within a price range of Rs 320-325 per share, primarily in lot sizes of 5,000 shares each. According to data compiled by BloombergQuint, a lot size of 5,000 shares is valued at Rs 16.25 lakh. “The transactions are mainly undertaken by high networth individuals who have a holding capacity of 2-3 years. Right now, the trading price is around Rs 320-325 per share and average lot size ranges from upwards of 2,000 shares, with an average lot size of 5,000 shares,” said Harshvardhan Roongta, Certified Financial Advisor at Roongta Securities.
HNIs anticipate high demand for India’s first insurance IPO and would rather buy shares in off-market trade and hold for one year than buy at a higher price with no certainty on the quantum of shares, Roongta added
ICICI Bank is looking to raise between Rs 5,500-5,800 crore through an offer for sale of shares in its subsidiary ICICI Prudential Life. The offer for sale consists of 18.13 crore shares amounting to 12.6 percent of the equity capital of the company. The company received the final nod from market regulator Securities and Exchange Board of India on Wednesday, reported news agency PTI.
The Float
Nearly 99.5 percent of the company’s total equity is held by promoters – ICICI Bank and Prudential Corporation Holdings Ltd. – and strategic investors which include Azim Premji’s Hasham Traders and Compassvale Investments Pte. Ltd., an indirectly-owned subsidiary of Singapore-based Temasek Holdings.
Only 0.5 percent of the shareholding is free-float, held by employees who have exercised their stock options and other non-promoter shareholders like high networth individuals. According to the draft red herring prospectus filed with SEBI, the company had 894 shareholders at the time of filing the prospectus. Employees have so far sold 96.12 lakh shares in off-market transactions and nearly 50 lakh shares are yet to be exercised.
- Total number of shareholders: 874
- Total options granted: 2.4 crore shares
- Options exercised: 96.12 lakh shares
- Options cancelled: 95.68 lakh shares
- Options outstanding: 50 lakh shares
No options were granted in the last three financial years. NS Kannan, the executive director of ICICI Bank and former chief executive officer of the insurance company Shikha Sharma were among the key senior management who exercised options.
The IPO Value
According to data compiled by BloombergQuint, the off-market traded price value the insurance company at Rs 46,579 crore. A banker who is working on the IPO told BloombergQuint on the condition of anonymity that, given the current market conditions, it would be appropriate to bring the issue in the current month.
ICICI Bank and ICICI Prudential Life Insurance did not respond to BloombergQuint queries.