Divesting Stake In ICICI Prudential Was As Per Long-Term Plan: Chanda Kochhar
ICICI Bank will hold 54% in ICICI Pru three years from now: Chanda Kochhar
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The listing of its insurance joint venture, ICICI Prudential Life Insurance Company Ltd. was part of ICICI Bank Ltd.’s long-term plan to divest stake in its major subsidiaries and does not indicate that the foreign partner was unwilling to raise its stake, the private lender’s Managing Director and Chief Executive Officer Chanda Kochhar told BloombergQuint in an interview.
Earlier this year, the Indian government eased foreign direct investment norms in the insurance sector, allowing 49 percent foreign holding, instead of 26 percent earlier. Prudential Corporation Holdings Ltd. chose not to exercise this option.
However, over the next three years, there is unlikely to be a significant reduction in ICICI Bank’s stake in the insurance venture from the post-IPO holding. ICICI Bank will hold 54 percent in the joint venture three years from now, while Prudential will cut its stake to 20 percent from 26 percent now, Kochhar added.
Listed companies must achieve a public shareholding of at least 25 percent within three years of listing, according to Securities and Exchange Board of India’s norms.
Kochhar refused to disclose the use to which the proceeds of the offer for sale in ICICI Prudential would be put.
The price band for the share sale has been fixed at Rs 300-334 per equity share. At the higher end of the price band, ICICI Bank would earn over Rs 6,000 crore from the issue. The offer will open for subscription on Monday, September 19 and close on Wednesday, September 21, ICICI Bank said in a filing to the stock exchanges.