ICICI Bank to sell 6% stake in life insurance arm

ICICI Bank, the largest private sector lender, on Monday said it would sell 4 per cent stake in its life insurance arm to Premji Investments and its affiliates while another two per cent to Compassvale Investment Pte, a wholly owned subsidiary of Temasek, the Singapore government’s investment vehicle.

The deal values ICICI Prudential Life at Rs.32,500 crore, the bank said.

The move to sell stake to a foreign firm comes after the government hiked foreign direct investment (FDI) ceiling in the insurance sector to 49 per cent, from 24 per cent. Prudential Plc, the joint venture partner, will continue to have 24 per cent stake.

“Upon completion of the transaction, ICICI Bank will hold approximately 68 per cent share in the company (ICICI Pru),” ICICI Bank said in a notification to the exchanges.

This is second stake sale proposal by ICICI Bank in one of its subsidiaries in less than a month. On October 29, ICICI Bank decided to sell 9 per cent stake in its general insurance venture ICICI Lombard General Insurance to its foreign partner Prem Watsa-promoted Fairfax Financial Holdings. The deal values the company at Rs.17,225 crore.

The insurer now will have to apply to the Foreign Investment Promotion Board (FIPB) for its approval for the stake sell. Post-FIPB approval, the insurance regulator will be required to give its nod to the deal. ICICI Prudential, the largest private sector life insurer, collected Rs.3,816 crore new business premium during the financial year till October, reflecting a 46 per cent growth compared to 21 per cent growth registered by the life insurance sector.

To appoint Vishakha Mulye as Executive Director

ICICI Bank has decided to appoint Vishakha Mulye, Managing Director and Chief Executive Officer of one of its subsidiaries — ICICI Ventures — as the Executive Director of ICICI Bank. She will also be a wholetime director on the board of the bank. The proposal will need Reserve Bank of India’s approval.

The three other Executive Directors of the bank are Rajiv Sabharwal, N.S. Kannan and K. Ramkumar.

Ms. Mulye, who is a Chartered Accountant, joined the bank in 1993 was instrumental in the merger of erstwhile infrastructure financier ICICI and the bank in 2002. After the merger, she was responsible for bank’s structured finance and global markets businesses, and its financial institutions relationships.