ICICI Holdings plans $500 mn stake sale

ICICI Holdings, ICICI Bank's subsidiary which owns its insurance and asset management businesses, is selling 5 per cent stake to private equity investors and foreign reinsurers for $500 million.

The private equity investors likely to buy the stakes are General Atlantic, Government of Singapore Investment Corporation Private and Temasek.

Sources indicated that all investors would be allotted equal stakes in ICICI Holdings. The company has sought regulatory clearance and appointed JP Morgan as the financial advisor for selling the stake. The two Singapore-based private equity players, GIC and Temasek, have stakes in ICICI Bank.

ICICI Bank when contacted declined to comment. ICICI Bank was looking at valuing ICICI Holdings at $10 billion, the sources said.

ICICI Holdings' 74 per cent stake in ICICI Prudential Life Insurance Company is valued at $6 billion and in ICICI Lombard General Insurance Company at $3 billion. The bank's 51 per cent stake in ICICI Prudential Asset Management is valued at $1 billion.

The private placement is just the beginning. ICICI Holdings is planning to list its equity shares at an appropriate time to meet a part of its further capital requirements for ICICI Life and ICICI General.

However, ICICI Bank intends to retain the majority ownership in ICICI Holdings. ICICI Prudential Life has registered a growth rate of 103 per cent in new business premium at Rs 4,381 crore, and has a 10 per cent market share.

But the company's loss jumped to Rs 649 crore in the financial year ended March 31, 2007 from Rs 187 crore a year earlier. ICICI Lombard registered a profit of Rs 68.36 crore in 2007 against Rs 50.31 crore a year earlier.

ICICI Prudential Asset Management has 11.6 per cent market share with assets under management of around Rs 37,900 crore. It recorded a profit of Rs 48.38 crore in 2006-07 against Rs 31.13 crore in the previous year.

Kalpana Morparia, deputy managing director of ICICI Bank, will take charge as managing director and CEO of ICICI Holdings from June 1.