PNB MetLife India Insurance Co. Ltd, which is among India’s top 10 life insurers by market share, has received regulatory nod to float an initial public offering (IPO) three months after filing prospectus.
The Securities and Exchange Board of India (SEBI) issued final observations to PNB MetLife’s IPO proposal on Friday, information on the regulator's website shows. PNB MetLife had filed its prospectus with SEBI on 27 July.
With this, SEBI has approved 63 IPO proposals so far in 2018, up from 46 last year.
The public issue comprises a share sale by state-owned lender and majority owner Punjab National Bank (PNB), joint venture partner American multinational insurer MetLife, Inc., and other corporate bodies and institutional shareholders.
For parent firm PNB, this will be the second such stake sale in three years. In October 2016, PNB’s mortgage lending arm PNB Housing Finance went public with a Rs 3,000-crore IPO, valuing the company at Rs 12,850 crore ($1.9 billion).
The PNB MetLife IPO comprises a sale of 495.89 million shares and will result in 24.64% stake dilution, the prospectus showed.
VCCircle was the first to report last July about MetLife’s plans to list PNB MetLife.
In June, VCCircle also reported that MetLife was looking to raise its stake in the Indian life insurance business.
PNB MetLife joins a growing list of Indian insurance companies – general and life – that have either firmed up plans to go for IPO or have already gone public.
These include state-owned firms National India Assurance and General Insurance Corporation of India, and private sector’s HDFC Standard Life Insurance Co., ICICI Lombard General Insurance Co. and Reliance General Insurance Co.
PNB had acquired a 30% stake in PNB MetLife (then MetLife India Insurance Co.) from Jammu and Kashmir Bank in February 2013 for an undisclosed amount. This was after the insurance regulator approved the share transfer in October 2012 with a five-year lock-in from the date of transfer. The lock-in clause may have lapsed in February 2018.
The acquisition saw MetLife India Insurance Co. rebrand itself as PNB MetLife. A year later, Jammu and Kashmir Bank exited its holding by selling the balance five per cent stake to PNB.
Indian promoters hold 74% stake in the company, going by its latest annual report. Other shareholders include Elpro International (21%) and M Pallonji & Co. (18%).
PNB MetLife reported a net profit of Rs 63.87 crore for the financial year 2016-17 on total revenue (including premiums, income from investments, and other income) of Rs 4,676.75 crore, going by its latest annual report. In the previous financial year, gross revenue stood at Rs 3,022.79 crore and net profit was Rs 53.62 crore.