ICICI Pru IPO closes on high note; oversubscribed 10.5 times

The scrip had also outperformed the market in past one quarter, gaining 11.96% as against Sensex’s 5.57% rise.

The issue size represents about 12.63% of the insurer’s post-offer equity share capital. The shares were offloaded for around Rs 1,950 crore, valuing the insurer at Rs 32,500 crore.

ICICI Prudential Life Insurance Company could manage to secure 76 percent subscription for its mega initial public offering (IPO) by 1pm on Wednesday, the third and closing day of its public issue.

The quota for non-institutional investors was subscribed 3.63 times, while the QIB portion got subscribed 1.91 times. The bidding for the IPO concluded on 21 September 2016.

“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. The price band for the IPO was Rs 300 to Rs 334 per share. For the first time in India, the I-Pru Life offer had reserved a portion for shareholders of ICICI Bank, the life insurer’s main promoter. The investor or “applicant” uses his PAN card (proof that he is assessed for income tax), Demat account (electronic account where shares are held in dematerialized form, a must for stock market transactions) and a bank account, and is paid a fee for making such applications.

Of the total offer, shares worth Rs 1,634 crore were allotted to select institutional investors (anchor investors) a day before the IPO opened, while shares in the non-anchor part – worth about Rs 4,400 crore – were offered to the public. It allocated over 4.89 crore shares at Rs 334, the top-end of the price band, aggregating Rs 1,635.33 crore to a clutch of anchor investors.

The investors included Morgan Stanley, Goldman Sachs, Nomura, Government of Singapore, UTI Mutual Fund, Russell Investment, GMO Emerging, SBI Mutual Fund, Tata Mutual Fund, HDFC Standard Life, Reliance, Birla Sun Life, Kotak Mahindra and IDFC, among others.

ICIC Prudential Life Insurance is a joint venture between Indian private sector lender ICICI Bank and British insurance firm Prudential Plc. As per the same, the company is valued at 3.09 times and 3.44 times on the lower and upper bands of the price band, respectively.