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New India Assurance's IPO got fully subscribed on Day 1 itself.
According to BSE and NSE data, the IPO received bids for just over 12 crore shares by 3.30 pm on Wednesday, which was 1.03 times the total issue size.
The country's largest general insurance company in terms of net worth, domestic gross direct premium, profit after tax and number of branches, has fixed the price range at Rs. 770-800 for its IPO, a move that would enable it to raise Rs 9,700 crore at the upper band of the offer.
The general insurer is selling 12 crores shares with a face value of Rs. 5 each of which 2.4 crore shares are fresh issue and 9.6 crore shares are an offer for sale (OFS).
The total issue will constitute 14.56 per cent of the post offer paid-up share capital of the company. Retail individual investors and qualified employees will get a price discount of Rs 30 per share each.
Kotak Investment Banking, Axis Capital, IDFC Bank, Nomura and Yes Securities are the banks managing New India Assurance’s IPO.
Shares of ICICI Lombard General Insurance Company, the listed peer company, will remain in focus, as its investors study institutional interest, both domestic and foreign, and HNIs’ appetite for the public issue.
For New India Assurance , the largest general insurance company in India and a leader across segments, growing business over the next couple of years will not be a challenge.
The company’s diverse product portfolio, wide distribution network and strong relationship with large corporates are key positives that will help it benefit from the growing opportunities in the general insurance space.
On a price-to-book basis too, New India Assurance does not appear cheap. On FY-17 and annualised June 2017 book value (excluding fair value change — unrealised gains/losses arising due to changes in the fair value of listed equity shares and mutual funds), the issue is priced at 5.2 times and five times, respectively. Though this is lower than the 7-8 times that ICICI Lombard trades at, it is nonetheless pricey.
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