BoB-backed IndiaFirst Life Insurance files DRHP with Sebi for IPO

The IPO will consist of a fresh offer of Rs 500 crore and an offer for sale of 141.2 million shares

Bank of Baroda or BoB-backed IndiaFirst Life Insurance has filed its draft red herring prospectus with the markets regulator Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) this year, which will consist of a fresh issue of Rs 500 crore and an offer for sale of 141.2 million shares.

IndiaFirst Life is the third insurer after Life Insurance Corporation and Go Digit Insurance to file draft papers for an IPO with the markets regulator this year.

Promoters Bank of Baroda (BoB) and Carmel Point Investments Pvt Ltd will sell 89 million shares and 39.22 million shares, respectively, in the offer for sale. Union Bank of India will sell 13.05 million shares in the share sale process.

The insurer will use the proceeds from the fresh issue to augment its capital base to support solvency levels. Further, the proceeds from the fresh Issue will also be used towards meeting the expenses in relation to the Offer.

BoB has a 65 per cent stake in the life insurer and Union Bank of India has a 9 per cent stake. Carmel Point Investments India Private Limited, a body incorporated under the laws of Mauritius and owned by private equity funds managed by Warburg Pincus LLC, New York, United States, owns the remaining 26 per cent.

The company reported a net loss of Rs 41 crore in Q1FY23 and Rs 281.6 crore in FY22. However, it had earned a profit of Rs 30.89 crore in FY21.

In Q1FY23, the insurer earned a new business premium of Rs 501 crore and renewal premium of Rs 406.92 crore. Its assets under management (AUM) was to the tune of Rs 18,637 crore. It maintained a solvency ratio of 166 per cent, as against the regulatory requirement of 150 per cent.

ICICI Securities, BNP Paribas, HSBC Securities, JM Financial, among others, are said to be the book runners for this share sale transaction of the company.

IndiaFirst will be the fourth private sector life insurer to get listed on the bourses and overall, the fifth life insurer to go for an IPO. The other four are ICICI Prudential Life Insurance, SBI Life Insurance, HDFC Life Insurance, and Life Insurance Corporation of India.

Four other insurers in the general insurance space are also listed on the bourses -- namely ICICI Lombard General Insurance, New India Assurance, General Insurance Corporation, and Star Health & Allied Insurance.