Shares of ICICI Prudential Life Insurance fell sharply on Monday after promoter Prudential plc is likely to reduce its holding in the insurer to below 10% as part of its proposed acquisition of a controlling stake in Bharti Life Insurance.The stock plunged nearly 9% its lowest level in more than two years, before recovering some losses. Shares were last trading around 3% lower compared with the previous close.The sharp decline came after ICICI Bank clarified that it would continue to retain majority ownership in ICICI Prudential Life Insurance despite Prudential plc’s proposed transaction involving Bharti Life Insurance.Prudential currently owns around 21.91% in ICICI Prudential Life, while ICICI Bank holds approximately 51% stake in the insurer.The British insurer recently agreed to acquire a 75% controlling stake in Bharti Life Insurance from Bharti Life Ventures and funds managed by 360 ONE Asset Management.As part of the acquisition structure and regulatory requirements, Prudential will be required to cut its shareholding in ICICI Prudential Life Insurance to below 10% and will also cease to be classified as a promoter of the company.The proposed transaction remains subject to regulatory approvals and customary closing conditions.The market reaction reflects investor concerns around potential changes in promoter structure, long-term strategic alignment and possible stake sale overhang in ICICI Prudential Life shares.The insurer remains one of India’s largest private life insurance companies with operations spanning unit-linked insurance plans, annuity products, protection products and group insurance offerings.ICICI Prudential Life Insurance posted a 10.5% rise in embedded value to Rs 52,989 crore during FY26 compared with Rs 47,951 crore in the previous financial year. Profit after tax increased 34.6% year-on-year to Rs 1,600 crore.The company’s value of new business stood at Rs 2,629 crore for FY26, up 11% YoY, while VNB margin came in at 24.7%. For the March quarter alone, the insurer reported VNB of Rs 965 crore.Also read: Bharti Airtel claims No.2 spot: How it beat HDFC Bank to become India's second most valuable companyThe sharp fall in the stock was more linked to uncertainty around future ownership structure and potential supply of shares rather than immediate operational weakness in the business.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)