The Hindu Business Line : ICICI Holdings raising capital thru pvt placement

Mumbai April 28 ICICI Holdings, the new subsidiary being set up by ICICI Bank, will raise capital through private placement of equity before hitting the capital market with an initial public offering.

The bank had decided to hive off its insurance and mutual fund businesses into a separate subsidiary.

The bank will transfer to the new entity its investments in ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance Company, Prudential ICICI Asset Management Company and Prudential ICICI Trust Ltd.

"We have to first receive approvals from the RBI and IRDA to set up the company. We will then raise capital from third-party investors in the form of placements before we go in for an IPO," said Ms Kalpana Morparia , Joint Managing Director, ICICI Bank.

The holding company has been set up to raise funds for its capital-intensive insurance and mutual fund subsidiaries. Analysts estimate the valuation of the holding company at between Rs 17,000 crore and Rs 30,000 crore.

Market value

ICICI Prudential Life Insurance has registered a growth of 103 per cent in new business premium at Rs 4,381 crore and has a 10 per cent market share.

The company, however, saw a jump in its net loss to Rs 649 crore in the fiscal ending March 31, 2007, against Rs 187 crore in the previous year.

"The phenomenal growth of the company in the last year has meant an increase in statutory losses," said Ms Shikha Sharma, CEO, ICICI Prudential Life Insurance.

Life insurance companies make losses in the first few years owing to customer acquisition costs and providing for actuarial liability, said a press release.

Growth

The company expanded its branch network from 177 to 583 in the last fiscal and grew its agency force from 72,000 and 2,34,000 during the same period.

ICICI Lombard General Insurance has registered a growth of 88 per cent in its gross written premium at Rs 3,003 crore against Rs 1,592 crore in the previous year. Mr Sandeep Bakshi, CEO, ICICI Lombard General Insurance, said retail policies contributed 56 per cent of the company's portfolio and health insurance brought in 22 per cent of the business.

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