L&T Finance Holdings has announced a price band of Rs51-Rs59 for its IPO
L&T Finance Holdings has announced a price band of Rs51-Rs59 for its IPO--the first from L&T group since 1950--which will hit the market on July 27 to raise Rs1,245 crore.
"The issue opening on July 27 and closing on 29 will see L&T Finance Holdings diluting between 15% and 17% of its equity shareholding and will be priced in the range of Rs51 to Rs59 per share," L&T Finance Holdings chairman and group chief financial officer YM Deosthalee told reporters here.
Deosthalee said at least 50% of the net issue will be allocated to qualified institutional buyers out of which up to 30% may be reserved for anchor investors. Out of this 30%, one-third may be reserved for the domestic mutual funds too, he added.
The company is expecting to mop up Rs161 crore from the anchor investors.
L&T Fin Holdings has reserved shares worth Rs50 crore for the employees out of the 12,450 million shares on offer, and worth Rs120 crore for the L&T shareholders, Deosthalee said.
He added that there was also a reserved portion for the L&T Group employees and existing L&T shareholders, both of whom would get a Rs2 discount to the issue price. The anchor investor portion will be open on July 26, the company said.
Reliance Life has been approached by some banks for partnership based on equity-participation in the company and it was open to exploring such opportunities
Private sector insurer Reliance Life said it has been approached by some banks for partnership based on equity-participation in the company and it was open to exploring such opportunities.
In lieu of minority equity stake, such partnerships help insurers tap the bank's vast distribution network for sale of their life insurance products.
"Reliance Life has been approached by a few banks to explore 'equity participation' based partnership models," Reliance Life Insurance Company's President and Executive Director Malay Ghosh told reporters.
Reliance Life is one of the leading private sector insurer in the country and part of Reliance Capital , the financial services arm of Anil Ambani-led Reliance group.
"We are open to exploring innovative partnership structures, including equity partnership to leverage the Bancassurance opportunity," Ghosh said.
He said that Reliance Life's partner Nippon Life Insurance was also in agreement with this strategy.
Earlier this year, Reliance Life announced sale of 26% stake to Japan's Nippon Life for Rs3,062 crore in the country's largest ever FDI in insurance sector. The deal, which valued Reliance Life at about Rs11,700 crore, is currently awaiting approval from various authorities.
Ghosh said that Reliance Life soon expects the approval for the deal.
While he declined to disclose the name of the banks that have approached it for equity participation, Ghosh said that "if any third party is interested in stake purchase, then that company would buy from the 74% stake remaining with Reliance Capital."
When asked about any IPO plan in the near future, he said there was no such plan as of now.
Bancassurance has emerged as a major distribution channel for life insurance industry, which is a highly distribution driven business.
Besides, those bancassurance partnerships where the bank has a stake in the insurance company tend to work better.
Insurance products are generally sold and not bought and therefore role of intermediaries is of utmost importance in the life insurance business.
Banks with their wide branch networks, trained staff, large customer base and high number of customer walk-ins are among the ideal distributors.
Over the last decade, banks have started contributing to 20-30% of the life insurance business for private insurers, while it is as high as 60% for some companies.
The five RRBs have 1,000 branch offices across 40 districts
IndiaFirst Life Insurance said it has partnered with five Regional Rural Banks (RRBs) to sell its products to customers in the hinterland.
The insurer has tied up with Bank of Baroda -sponsored RRBs: Baroda Uttar Pradesh Gramin Bank, Baroda Rajasthan Gramin Bank and Baroda Gujarat Gramin Bank, besides Nainital-Almora Kshetriya Gramin Bank and Jhabua-Dhar Kshetriya Gramin Bank, a statement issued here said.
The company's initial plan is to tie up with the RRBs of its partner bank and later expand to RRBs of other nationalised banks and cooperative banks, it said.
The five RRBs have 1,000 branch offices across 40 districts. Some of them have had experience in distributing life insurance products thereby providing a ready platform to IndiaFirst Life for launching and rapidly scaling up operations, it added.
"This new tie-up will help us serve our customers in rural areas in a better and effective way. There is an urgent need in the country to not only taking financial services to the rural populace but also to make them financially literate for true development to take place," IndiaFirst Life Insurance Managing Director and CEO, P Nandagopal, said.
The insurance company is a joint venture between Bank of Baroda, Andhra Bank and UK's leading risk, wealth and investment company Legal and General. Bank of Baroda holds a 44% stake in the firm, while Andhra Bank and Legal and General 30% and 26% respectively.