Reblog: New India Assurance IPO Review

IPO Snapshot:

The New India Assurance Company is entering the primary market on Wednesday 1st November 2017 with an IPO of up to 12 crore equity shares of Rs. 5 each, comprising fresh issue of upto 2.40 crore equity shares and an offer for sale (OFS) of 9.60 crore equity shares by promoter Indian Government, both in the price band of Rs.770 to Rs. 800 per share, with Rs. 30 per share discount for retail investors. Representing 14.56% of the post issue paid-up share capital, issue will raise Rs. 9,474 crore, at the upper end, of which, Rs. 1,895 crore will flow into the company via fresh issue and balance Rs. 7,579 crore will meet FY18 divestment target of Rs. 72,500 crore. Issue will close on Friday 3rd November and listing is expected on 13thNovember.

Company Overview:

New India Assurance, 99.99% subsidiary of Government of India, is the country’s largest general insurance company, with 15% market share (down from FY16’s 15.7%) in gross direct premium, enjoying leadership in all segments, such as motor, health, fire, marine, except crop. In FY17, motor, health, fire, marine, crop segments accounted for 39%, 26%, 15%, 3% and 5% of company’s gross written premium, respectively, which is more-or-less in line with the industry structure, except for crop insurance where all private sector insurers have been more aggressive. Company has a robust pan India multi-channel distribution network, comprising 2,452 offices, 68,389 agents, 16 corporate agents, 25 bancassurance partners (including Bank of India and Canara Bank), with individual agents, direct sales and brokers accounting for 42%, 31% and 26% of business respectively.

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