Prudential To Reduce Stake In Insurance JV With ICICI Bank To 20% By 2019

Prudential Corp Holdings Ltd, the foreign joint venture partner in ICICI Prudential Life Insurance Company Ltd, will reduce its stake in the company to 20 percent by 2019 from 26 percent now, according to ICICI Bank’s Managing Director and Chief Executive Officer Chanda Kochhar.

The Indian insurance company plans to launch its initial public offer (IPO) on September 19 to sell 12.6 percent stake. This stake is being offloaded by ICICI Bank, while Prudential Corp will continue to hold 26 percent in the joint venture.

ICICI Bank currently holds around 68 percent stake in the joint venture.

At a press conference to announce the launch of the IPO, Kochhar said that according to an “understanding” with Prudential Corp, at the end of three years of listing, ICICI Bank would hold 54 percent stake in the joint venture, while Prudential Corp would hold 20 percent.

This will help the company meet regulatory requirements set down by the capital market regulator. According to Securities and Exchange Board of India norms, listed companies must have public shareholding of at least 25 percent within three years of listing.

Prudential Corp did not exercise its option to raise its stake in the insurance joint venture to 49 percent when the foreign direct investment norms were eased by the government earlier this year.

ICICI Bank aims to raise up to Rs 6,055 crore through the offer for sale. The price band for the share offering has been set at Rs 300-334 per share.