IndiaFirst Life Insurance's IPO Revolution

IndiaFirst Life Insurance's IPO brings lucrative prospects for investors.

India First Life Insurance IPO

Exciting times lie ahead for investors as IndiaFirst Life Insurance, supported by the Bank of Baroda (BoB), secures approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). This milestone event marks the debut of a life insurance company on India's stock market.

Bank of Baroda, holding a 44% stake in IndiaFirst Life Insurance, is poised to benefit substantially from the IPO. The public offering aims to generate an impressive Rs. 2,000 crores.

IPO Components: Fresh Issuance and Offer-for-Sale

The IPO consists of a fresh issuance of shares worth Rs. 500 crores and an offer for sale of 14.12 crore equity shares by existing shareholders. Bank of Baroda and Carmel Point Investments India plan to sell 8.9 crore and 3.92 crore equity shares, respectively, through the offer for-sale process.

Union Bank of India also intends to offload 1.3 crore shares via an open market sale. The pre-IPO placement is estimated to accumulate Rs. 100 crores for the company. IndiaFirst Life Insurance aims to use a considerable portion of the proceeds from the fresh issue to expand its capital base, ensuring that appropriate solvency levels are sustained.

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In IndiaFirst Life Insurance, the Bank of Baroda owns a 65% stake, while Carmel Point Investments India and Union Bank of India hold 26% and 9%, respectively.

IndiaFirst's Remarkable Expansion

A CRISIL report ranks IndiaFirst among the fastest-growing private life insurers in India in terms of new business IRP growth in FY22. Despite a loss of Rs. 281.62 crores for the fiscal year ending March 2022, the company's net premium revenue increased by 27.8% to Rs. 4,985 crores.

The individual new business premium also witnessed a 55% surge to Rs. 1,429 crores, with a 35% increase in new business premium to Rs. 2,766 crores for FY22.

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The company's value of the new business (VNB) margin rose from 10.5% in FY21 to 23.10% in FY22. During the previous fiscal year, IndiaFirst Life Insurance sold 2.65 million policies, a marked improvement from 1.97 million in the preceding year.

Recent Financial Highlights

For the quarter ending June FY23, IndiaFirst Life Insurance reported a loss of Rs. 41.83 crore and net premium earned gains of Rs. 873.52 crores. The new business premium for the quarter reached Rs. 501 crores, with individual customers contributing Rs. 307.3 crores to the new business premium.

The issue's merchant bankers include ICICI Securities, Ambit, BNP Paribas, BOB Capital Markets, HSBC Securities and Capital Markets (India), Jefferies India, and JM Financial. This eagerly awaited listing presents a potentially attractive investment opportunity.

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