ICICI Holdings to offload 5% stake

Deal values ICICI's insurance, MF business at $10 bn.

ICICI Holdings, which will control the insurance and mutual fund business of ICICI Bank, will go in for private placement of a 5 per cent stake to raise around $500 million. It has appointed JP Morgan as the financial advisor.

ICICI Bank was looking at valuing ICICI Holdings at $10 billion, sources said. Vishaka Muley, chief financial officer of the group, refused to comment on the development.

ICICI Holdings' 74 per cent stake in the life insurance business (ICICI Prudential) and general insurance (ICICI Lombard) is valued at $6 billion and $3 billion, respectively. The 51 per cent stake in its mutual fund business (Prudential ICICI Asset Management) is valued at $1 billion.

In its board meeting in March, ICICI Bank had decided to incorporate ICICI Holdings, a new wholly-owned subsidiary, subject to necessary approvals.

ICICI Bank also proposed to transfer ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance, Prudential ICICI Asset Management and Prudential ICICI Trust to the new company.

These investments will be transferred to ICICI Holdings at the book value in the books of ICICI Bank (now about Rs 1,950 crore). ICICI Life and ICICI General are the largest private sector life insurance and general insurance companies, respectively, in India.

ICICI Prudential Life Insurance 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.

However, the company's net loss jumped to Rs 649 crore in the financial year ending March 31, 2007, from Rs 187 crore last year.

ICICI Holdings may consider a public listing of its equity shares at an appropriate time to meet a part of the further capital requirements of ICICI Life and ICICI General. However, ICICI Bank intends to retain majority ownership in ICICI Holdings.

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

However, the company's net loss jumped to Rs 649 crore in the financial year ending March 31, 2007, from Rs 187 crore last year.

ICICI Lombard General Insurance has registered a growth rate of 88 per cent in its gross written premium at Rs 3,003 crore against Rs 1,592 crore in the previous year.

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HIGH STAKES

ICICI Holdings' 74% stake in ICICI Pru is valued at $6 bn

Its 74% stake in ICICI Lombard is worth $3 bn

Its 51% stake in Prudential ICICI Asset Management is valued at $1 bn

Kalpana Morparia to take charge as CEO of ICICI Holdings