IndiaFirst Life Insurance Company, promoted by the Bank of Baroda, has received approval from the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO). The company filed its draft red herring prospectus (DRHP) with SEBI in October 2022, and the public issue will consist of a fresh issue of equity shares worth up to Rs 500 crore and an offer-for-sale (OFS) of up to 14.1 crore equity shares by the promoter and other selling shareholders.
Bank of Baroda will offload approximately 8.9 crore equity shares, Carmel Point Investments will tender 3.9 crore equity shares, and Union Bank of India will offload 1.3 crore equity shares.
BoB, India’s third-largest public sector lender, holds a 65% stake in the firm, followed by Warburg Pincus affiliate Carmel Point Investments India, which has 26%, and Union Bank of India, with a 9% stake.
A private placement on a preferential basis or a rights issue aggregating up to Rs 100 crore is under consideration. The new issue size will be reduced if such a placement is completed. The company will broadly use the fresh issue proceeds to augment its capital base to support solvency levels. The net proceeds from the fresh issuance will also be used towards this goal.
IndiaFirst Life Insurance Company is supported by an extensive bancassurance network provided by Bank of Baroda and Union Bank, two of India’s largest public sector banks. The company claims to be one of India’s fastest-growing private life insurers in terms of new business IRP in FY22, as per a CRISIL report.
In the financial year that ended March 2022, the company lost Rs 281 crore against a profit of Rs 30 crore a year back. However, its net premium earned for FY22 stood at Rs 4,985 crore, up 27.8% over the previous year, and the new business premium at Rs 2,766 crore for FY22 jumped 35% from a year earlier. The company reported a value of the new business (VNB) margin of 23.10% in FY22 against 10.5% in the previous year, backed by a balanced product portfolio and expansive bancassurance networks through Bank of Baroda and Union Bank of India.