The primary markets in India, are buzzing with activity, as New India Assurance (NIA), the largest general insurance company in India, is set to hit the primary markets with Rs 10,000 crore initial public offering (IPO) in the first week of November. At such an issue size, this will be among India’s top five IPOs ever. New India Assurance Company, which is the country’s largest non-life insurer, had filed a draft prospectus with Securities and Exchange Board of India (Sebi) in August and received necessary ‘observations’ from it on September 15. The issue comes soon after the Rs 11,370 crore IPO of General Insurance Corp of India (GIC Re), which will be listed on 25 October. There have been a couple of more IPOs in last one and half months, which include ICICI Lombard’s Rs 5,700 crore issue and SBI Life which raised Rs 7,000 crore through its IPO. We bring to you key things to watch out for in the IPO-
The company will sell 2.4 crore shares through the IPO, while the government will sell 9.6 crore shares. According to PTI reports, the company and the government will together sell a total of 12 crore shares through the share sale offer, constituting around 14.56 per cent of the company’s post-issue share capital. The company is likely to announce other details such as price band and lot size this week.
Size of the company
New India Assurance has assets of over Rs 69,000 crore and solvency of 2.27 despite growing at compounded annual growth rate of over 15% for last five years, reported PTI. NIA’s net worth, including fair value of investments, increased to over Rs 38,100 crore as of June-end. Its market value of investments stood at Rs 63,100 crore at the end of June quarter of the current fiscal. The company has a market share of 16%, according to PTI.
Response to IPO road shows
According to PTI reports, the company’s top management had completed the overseas road shows and had seen robust response for the issue. Earlier, the company had appointed five merchant bankers — Kotak, Axis Bank, Nomura, IDFC and Yes Bank for the IPO. further, PIT says that the company is targeting Rs26,000 crore premium in the current fiscal, and is the largest general insurer in terms of premium, profits, market share and distribution network.
Other Insurance IPOs
The other three insurance IPOs which are likely to hit the streets before the end of calendar year are HDFC Life, Reliance General and National Insurance Company. HDFC Standard Life Insurance Company received SEBI’s go ahead to raise an estimated Rs 7,500 crore through its IPO last week. Earlier this month, Reliance General Insurance filed its Draft Red Herring Prospectus (DRHP) with market regulator SEBI for making an initial public offering. National Insurance Company has reportedly approached the Insurance Regulatory and Development Authority (Irda) for approval to list the company.