Temasek, Carmignac said to be in talks for ICICI insurance stake

[MUMBAI] ICICI Bank Ltd, India's largest private-sector lender, is in talks to sell part of its stake in an insurance unit to Temasek Holdings Pte and Carmignac Gestion for about US$300 million, people familiar with the matter said.

The Mumbai-based lender plans to complete an agreement to sell about 5 per cent of ICICI Prudential Life Insurance Co by the end of March, the people said, asking not to be identified as the matter is private. The venture, which is part-owned by Prudential Plc, is India's biggest private-sector life insurer, according to insurance regulator data.

Singapore's state investment company and Carmignac, the Paris-based asset manager, are pursuing the purchase after Prime Minister Narendra Modi allowed more foreign investment in the insurance industry last year. ICICI follows Housing Development Finance Corp, the country's largest mortgage lender, in attracting investors to its insurance venture ahead of planned initial public offerings.

Mr Modi's move to allow more overseas investment in Indian insurance companies, passed by executive order last year, still needs to be approved by parliament for conversion into a permanent law. The country's lower house approved the bill this month, and government officials have said they can opt for a joint sitting to push the bill through the upper house where Mr Modi lacks a majority.

There's no certainty the discussions with ICICI will result in a deal and other investors may still express interest in the stake, according to the people. The bank plans to pursue an initial public offering of the venture after the insurance bill is passed, they said.

ICICI and Carmignac declined to comment in e-mailed statements. Stephen Forshaw, a spokesman for Temasek, declined to comment.

ICICI Prudential Life had a 16.2 per cent share of first-year premiums in the twelve months through December 31, making it the country's biggest private life insurer by that measure ahead of HDFC Standard Life Insurance Co, data from the Insurance Regulatory and Development Authority of India show. ICICI holds 74 per cent of its insurance arm, while Prudential owns the rest.

HDFC agreed last year to sell a 0.95 per cent stake in its insurance arm to a trust set up by Azim Premji, the billionaire founder of software exporter Wipro Ltd. The deal valued HDFC Standard Life at 210 billion rupees (S$4.65 billion), according to data compiled by Bloomberg.

The bank is waiting for lawmakers to approve the insurance bill before deciding on an IPO of the insurance business, HDFC chief executive officer Keki Mistry said January 29.

BLOOMBERG