ICICI Lombard Raises Rs. 485 Crore Through NCDs

In the first issuance by general insurance company, ICICI Lombard has raised Rs. 485 Crore through private placement of non-convertible debentures at an interest rate of 8.25% with a maturity of 10 years. The Insurance Regulatory and Development Authority has allowed insurance companies to raise sub ordinated debt to boost their capital base.

The company has total capital of Rs. 1,948 Crore. It has networth of Rs. 3,176 Crore at the end of March 31, 2016. We are excited to be the first insurance company to have augmented our capital base by issuing subordinated debt, post the recent measures announced by IRDA allowing alternative forms of capital," said Bhargav Dasgupta, MD "CEO, ICICI Lombard General Insurance.

Last year, ICICI Bank sold 9% stake in the general insurance company to its joint venture partner Fairfax Financial Holdings bringing down its stake to 63.82% while Fairfax holds another 34.58%. The deal valued ICICI Lombard at Rs.17,225 Crore. ICICI Securities Primary Dealership was the arranger for this issue.

After the amendment to the Insurance Act, many global insurance companies have raised their stake in their Indian joint venture companies. General insurance industry had grown at 13% last financial year. Over the last few years, the industry has witnessed several catastrophic events including Uttarakhand floods, cyclone Phailin and floods in Chennai and the surrounding regions in FY2016. The insurance regulator had allowed insurance companies to raise alternative forms of capital.