ICICI Prudential IPO to be biggest since 2010; should you invest?

ICICI Prudential's IPO is now open for subscription. This is the first for any private insurer in the country and will be the biggest since Coal India's Rs 15,000 crore IPO in 2010. 

Sebi has also announced that the ICICI Prudential IPO will be directly offered for listing -- a first for the IPO market. 

For listing on the exchanges, ICICI Bank will be offering 12.65% of its stake in the insurer via offer for sale. Public offer of up to 181,341,058 equity shares at a face value of Rs 10 each, will be up for grabs. 

ICICI Prudential is a tie up between ICICI Bank and Prudential Partners. The latter will not be selling its stake in the IPO. Temasek Holdings and Premji Invest also hold stake in the insurance company. 

ICICI Bank holds 68% stake of ICICI Prudential, while Prudential Partners hold 26%. Singapore's Temasek Holdings own 2% in the company, along with Premji Invest holding a 4% stake in the life insurance service provider.

Here's how ICICI Prudential's numbers stack up against the industry

ICICI Prudential has the largest asset base in the private life insurance sector with ICICI Bank holding assets worth Rs 7.2 lakh crore as on March 2016.

Prudential Corp has GBP 509 billion (or Rs 4,515.2 crore) of assets under management as of December 31, 2015.

In the previous fiscal 2016, ICICI Prudential's gross premium income stood at Rs 19,164 crore which comprised  Rs 4,924 crore of retail new business regular premium, Rs 432 crore in single premium,  Rs 11,995 crore of retail renewal premium, and Rs 1,813 crore of group premium.

The company's profit after tax was Rs 1,653 crore in fiscal 2016 and its return on equity exceeded 30% for each year since fiscal 2012. 

As of March 2016, the company had Rs 1,04,000 crore asset under management, making it one of the largest fund managers in India. 

On the expenditure front, ICICI Prudential has had a remarkable portfolio. The company's expense ratio was 14.6% in FY16 which was one of the lowest in the private sector life insurance companies in India.

From fiscal 2012 to fiscal 2016, the company's retail weighted received premium grew at a compound annual growth rate (CAGR) of 15.2% compared to a CAGR of 6.7% in the private sector.

The company's annualized premium equivalent from unit-linked insurance products increased from Rs 2,200 crore in fiscal 2014 to Rs 4,179 crore in fiscal 2015, show-casing 37.5% CAGR. Unit-linked insurance products comprised 82.6% of ICICI prudential's retail annualized premium equivalent in fiscal 2016.

ICICI Prudential has maintained a strong track record of delivering annual returns to shareholders. It has not received  a shareholder capital injection since fiscal 2009. It has paid cumulative dividend  of Rs 4032 crore since 2012. Also it has an embedded value of Rs 13939 crore as on March 2016. 

They also have a strong capital position with a solvency ratio of 320.0% as on March 31, 2016 compared to the IRDAI-prescribed control level of 150.0%.

The value of its new business grew from Rs 270 crore in fiscal 2015 to Rs  412 crore in fiscal 2016, representing an increase of 52.6%.

It has bancassurance partnership with its parent ICICI Bank and Standard Chattered Bank. In bancassurrance business - it recorded annualized premium equivalent to Rs 2964 crore which constituted 58.60% of the ICICI Prudential's retail annualized premium equivalent. 

Till July 12, 2016, they had over 4,500 branches. ICICI Prudential said, “We believe we are at the forefront of leveraging technology in the Indian life insurance sector, with our focus on digitization and transformation of sales, customer on-boarding and internal processes.“

In comparison with its peers the company has posted a stellar performance

ICICI Prudential said in a statement, "We  expect these macroeconomic factors, coupled with India’s large and young population, rapid urbanization and rising affluence to propel the growth of the Indian life insurance sector.