ICICI Pru Life planning to sell 5% stake: reports

ICICI Prudential Life Insurance has reportedly initiated a process to sell up to a 5 per cent stake, though the move is still in the early stages.

Long-term investors like sovereign funds, pension funds and other financial investors have evinced interest in picking up a stake in the life insurance joint venture between ICICI Bank Ltd (74 per cent) and Prudential Plc (26 per cent).

On Thursday, The Economic Times reported that ICICI Prudential Life insurance would sell a 5-per cent stake, pegging the valuation of the business at close to $6 billion (Rs30,000-36,000 crore).

An ICICI Bank spokesperson refused to comment on the story.

''The deal, if any, will only be concluded after the changes in foreign investment policy in the insurance sector are passed by both houses of parliament,'' said a source, adding that the idea was to show some monetisation in the business which is now almost 15 years old. ICICI Pru Life began operations in December 2000.

The government has passed an ordinance raising the foreign investment limit in the life insurance sector to 49 per cent from the current 26 per cent, though this will eventually need to be passed by both houses of parliament.

According to a Mint report, a number of life insurance firms are looking to establish their valuations through small stake sales in view of the increased foreign investment limits.

In December, Housing Development Finance Corporation (HDFC) sold a 0.95-per cent stake in its life insurance venture to Azim Premji Trust for Rs198.9 crore. The deal valued HDFC Life at Rs19,890 crore.

On 22 December, Arundhati Bhattacharya, chairperson of State Bank of India, told Mint that the bank could consider unlocking value in some of its subsidiaries, including its insurance subsidiary.

ICICI Prudential Life Insurance is the country's largest private sector insurance company. According to the consolidated results announced by ICICI Bank on 30 January, the life insurance firm achieved a profit after tax of Rs462 crore for the December ended quarter compared to Rs428 crore in the corresponding quarter last year.

ICICI Life maintains its leadership in the private sector, said the bank.