Bank of Baroda promoted IndiaFirst Life Insurance Company (IndiaFirst Life) has received capital markets regulator SEBI's approval to issue an Initial Public Offering (IPO).

The IPO comprises a fresh issue of up to Rs 500 crore along with an offer for sale (OFS) of up to 14,12,99,422 equity shares by the promoters and existing shareholders of the company.

Bank of Baroda will sell 8,90,15,734 equity shares, whereas Union Bank of India will sell 1,30,56,415 equity shares in the OFS. Carmel Point Investments India would offload 3,92,27,273 equity shares during the primary stake sale.

Bank of Baroda, India's third largest public sector lender holds a 65 percent stake in the company, followed by Warburg Pincus affiliate Carmel Point Investments India which holds 26 percent and Union Bank of India with 9 percent stake.

The firm may consider a private placement on a preferential basis or a rights issue aggregating up to Rs 100 crore. If such a placement is completed, the fresh issue size will be reduced.

The net proceeds from the fresh issuance worth Rs 500 crore will be used towards augmentation of its capital base to support solvency levels.

The company, which filed preliminary IPO papers with Sebi in October last year, obtained it's observation letter on March 15, an update with the Securities and Exchange Board of India (Sebi) showed on Tuesday.

ICICI Securities, Ambit, BNP Paribas, BOB Capital Markets, HSBC Securities and Capital Markets (India), Jefferies India and JM Financial are the book-running lead managers to the issue.

The equity shares will be listed on the BSE and NSE.