Bank of Baroda to divest up to 12.5pc stake in IndiaFirst Life

NEW DELHI: Bank of Baroda will divest up to 12.5 per cent stake in insurance arm IndiaFirst Life Insurance Company through an offer for sale in the initial public offer (IPO) of the insurer or any other mode.

The board of directors in a meeting on Saturday approved divesting up to 12.5 per cent of the shareholding of Bank of Baroda in IndiaFirst Life.

However, bank's shareholding in the life insurance subsidiary will not fall below 51 per cent.

The bank said the divestment will take place by way of offer for sale in the proposed initial public offer of IndiaFirst or through any other method permissible under the law, subject to market conditions and approval of market regulator Sebi, RBI and Irdai, and other authorities.

Mumbai-headquartered IndiaFirst Life Insurance Company is a subsidiary of Bank of Baroda. Carmel Point Investments India, owned by private equity funds managed by Warburg Pincus LLC, holds 26 per cent stake in the insurer. Union Bank of India is the company's third strategic partner (9 per cent stake).

IndiaFirst Life was a joint-venture between these three entities. During 2021-22, Bank of Baroda (BoB) acquired 21 per cent stake in the insurance company following a 'right of first offer' (ROFO) by Union Bank of India to the existing shareholders of IndiaFirst Life, following which it has become a subsidiary company of BoB.

BoB's holding in the company now stands at 65 per cent from 44 per cent earlier. Union Bank had acquired stake in IndiaFirst Life by way of merger of Andhra Bank into it in April 2020.

During FY22, IndiaFirst Life was the fastest growing life insurer in individual new business premium APE (Annual Premium Equivalent) income at 50 per cent yearly growth with 2.4 per cent private market share. It grew at 3.2 times the overall life insurance industry including LIC. It also improved its ranking by 1 position to 11th in terms of individual new business APE among the private peers as compared to last year. The assets under management (AUM) stood at Rs 18,932 crore as on 31st March 2022.