IndiaFirst Life Insurance Gets SEBI Approval For IPO

IndiaFirst Life Insurance has received an approval from market regulator Securities and Exchange Board of India to raise funds through an initial public offering.

The preliminary IPO papers, which were accepted on Oct. 27, were approved on March 15, the market regulator said in an update on its website.

The public offering consists of a fresh issue of equity shares worth up to Rs 500 crore and an offer-for-sale of up to 14.1 crore equity shares, as per the draft red herring prospectus.

For the offer-for-sale, Bank of Baroda is expected to offload about 8.9 crore equity shares, Carmel Point Investments India Pvt. will tender 3.9 crore equity shares, and the remaining 1.3 crore equity shares will be offloaded by Union Bank of India, the prospectus said.  

Once listed, IndiaFirst Life would become the fourth private life insurer to be listed independently on the exchanges.

The company is considering a private placement, preferential allotment, rights issue of up to Rs 100 crore in consultation with is merchant bankers. If this kind of placement is done, the size of the new issue would be cut by that much.

The proceeds from the fresh issue -- Rs 500 crores -- are to be used towards augmentation of the capital base to support solvency levels of the insurer, according to the draft prospectus.

The private insurer recorded its highest five-year growth in terms of new business individual-rated premiums amongst life insurers with PSU bank percentage, with a CAGR of 27.3% between fiscal 2017 and fiscal 2022, as per the prospectus. It is currently supported by an extensive bancassurance network provided by Bank of Baroda and Union Bank, two of India's biggest public sector banks.

ICICI Securities, Ambit Pvt Ltd., BNP Paribas, BOB Capital Markets, HSBC Securities and Capital Markets (India) Pvt Ltd., Jefferies India Pvt Ltd., and JM Financial are the book-running lead managers of the issue.