‘Public issue proceeds to be used for expansion, improving solvency ratio’

Rajesh Kurup Mumbai | Updated on January 08, 2018 Published on October 24, 2017

G SRINIVASAN, Chairman & MD, New India Assurance Co

Riding on the government’s plan to divest stake in public sector general insurance companies, New India Assurance Company (NIAC) is planning an IPO of nearly ₹10,000 crore, one of the largest in the country. In a tete-a-tete with BusinessLine, its Chairman & MD G Srinivasan, said the company intends to leverage the micro office model, launch innovative products and ride the digital wave. Excerpts:

When is NIAC’s IPO expected and what is the amount the company plans to raise?

We have filed the draft red herring prospectus with SEBI. The float is for 120 million shares of ₹5 each consisting of a fresh issue of up to 24 million shares and an offer-for-sale of up to 96 million shares. The issue will happen shortly. We will announce the price band soon.

What do you intend to do with the proceeds?

We propose to utilise the proceeds towards meeting our future capital requirements arising from the growth and expansion of our business and improving our solvency margin. Listing will add to our brand value and will showcase our strengths to the wider market.

Our focus will be on retail growth. Leveraging micro office model, launching innovative products, expansion of agency network, increased use of technology and digital would be some our strategies.

There has been increasing competition from private insurers in the country? Has this impacted your revenues?

New India Assurance, as per a CRISIL report, is the largest general insurance company in India as of March 31, 2017. This is in terms of premium, profits, net worth and number of offices. Despite the competition from private sector players, we have maintained pole position in the Indian general insurance market.

The penetration of general insurance in India has remained low for years. How is this impacting this business?

India’s general insurance penetration is about one per cent and is fairly low by global standards. There is a huge potential to be tapped in the general insurance space. It will be a high growth sector, largely driven by increasing insurance awareness and rising disposable incomes.

Has NIAC benefited from the Prime Minister’s various plans?

We have played an important role in various government insurance schemes, including the Pradhan Mantri Fasal Bima Yojana, the Unified Farmers’ Package Insurance, the Pradhan Mantri Suraksha Bima Yojana, the Rashtriya Swashtya Bima Yojana and various State government health insurance schemes.

As of March 31, we had provided insurance cover to over 15 million customers under the Pradhan Mantri Suraksha Bima Yojana, and had provided insurance cover to over 41.2 crore individuals having Rupay cards. The government’s measures have definitely helped the industry and our company in increasing businesses and also in increasing insurance penetration in the country.

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Published on October 24, 2017
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