ICICI Bank to retain majority stake in ICICI Prudential Life
What's the story
ICICI Bank has announced its decision to maintain a majority stake in the ICICI Prudential Life Insurance Company. The announcement comes after joint venture partner Prudential plc's decision to acquire a 75% controlling stake in Bharti Life Insurance Company. Currently, ICICI Bank holds around 51% in ICICI Prudential Life Insurance while Prudential owns nearly 22%.
Acquisition
What does Prudential have to do?
The deal will see Prudential buy the stake from Bharti Life Ventures Pvt Ltd and 360 ONE Asset Management's funds, subject to regulatory approvals as well as other conditions. As part of the proposed acquisition, regulators will require Prudential to lower its stake in ICICI Prudential Life Insurance to below 10% and stop being classified as a promoter of the insurer.
Strategy
ICICI Bank reaffirms commitment
In light of the announcement, ICICI Bank has reiterated its long-term commitment to maintaining majority ownership in ICICI Prudential Life Insurance. This comes despite market jitters following Prudential's acquisition announcement. After the disclosure, shares of ICICI Prudential Life Insurance fell nearly 9% to hit a 52-week low before recovering partially.