The promoters of ICICI Prudential Life Insurance Company, ICICI Bank and Prudential Holdings Ltd have three years to achieve SEBI’s minimum public shareholding norm of 25 per cent.

Post-IPO of the life insurance company, ICICI Bank’s shareholding will come down to 54.89 per cent from 67.52 per cent while Prudential’s stake will remain at 25.83 per cent.

However, both the promoters are not required to bring down their stake below 54 per cent (for ICICI Bank) and 20 per cent (for Prudential), according to an agreement mentioned in the red herring prospectus.

On the issue of the bank diluting its stake further in the life insurer, Chanda Kochhar, MD & CEO, ICICI Bank, said: “With this IPO, about 19 per cent will be with public shareholders. We have three years to make it 25 per cent.

Long-term intention Our understanding currently between the two shareholders is that the ultimate shareholding when we have finally to arrive at 25 per cent of listed stock would be around 54 per cent for ICICI Bank and 20 per cent for Prudential.”

On the issue of deployment of funds received from the IPO by ICICI Bank, Kochhar said the bank’s long-term intention had always been to divest a portion of its stake in the life insurer.

“After the IPO guidelines of insurance companies came out in 2015, we started working towards it — ICICI Prudential Life is now ready to be listed, it is a strong brand by itself and it is the right step to take to list this large company. The use of the proceeds is clearly a prerogative of the shareholders which we will discuss in another meeting.”

IPO ICICI Bank is diluting 12.63 per cent stake in its life insurance subsidiary — ICICI Prudential Life Insurance. A price band of ₹300-334 has been fixed for its IPO opening on September 19, 2016, and closing on September 22, 2016.

At the upper end of the price band the issue size translates to ₹6,056.79 crore.

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