Bank of Baroda-backed IndiaFirst Life Insurance Company (IndiaFirst Life) is likely to file its draft red herring prospectus (DRHP) soon to launch its initial public offering (IPO), said two sources in the know.

According to them, the Mumbai-based private insurer is likely to tap capital markets to raise funds worth Rs 2,000-2,500 crore at a valuation of Rs 9,000-10,000 crore for the company.

The IPO is likely to include both issuance of fresh equity shares and an offer from sale (OFS) from promoters and existing shareholders of the company, they added.

Following Go Digit Insurance and Life Insurance Corporation (

), IndiaFirst Life Insurance is set to be the third insurance player to file fpr IPO this year. In 2009, IndiaFirst Life Insurance became the 23rd private sector player in the category.

However, some other media reports, citing other sources, suggested that the issue might entirely be an OFS to mop up funds worth Rs 1,600-2,000 crore.

The company is likely to leverage on the under penetrated insurance sector in India. High GDP growth, rising income, younger population, rapid urbanisation, increasing financial literacy are some of the reasons supporting the sector.

India’s third-largest state-run lender Bank of Baroda owns a 65 per cent stake in the company, whereas holds a 9 per cent stake in it.

In 2019, Legal & General sold its stake to Warburg Pincus via Carmel Point Investments, which continues to remain invested through its 26 per cent stake in the company. This was the first private equity transaction as a promoter.

IndiaFirst Life turned profitable in the sixth year of its operations. Its individual new business annual premium equivalent (APE) has grown at 27 per cent CAGR. Its AUM stood at Rs 18,932 crore as on March 2022.

Ambit, , HSBC Securities, Jefferies, and among others are said to be the book running lead managers (BRLMs) to the issue, whereas KFin Technologies might be selected as the registrar for the same.

If listed, IndiaFirst Life Insurance will be the fourth private life insurer and overall fifth one, following LIC,

and Life Insurance.

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By Dipak

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