Nearly six months after the listing of New India Assurance Company, its Board of Directors recommended issue of bonus shares in proportion of 1:1, even as the general insurer reported a 39 per cent drop in net profit in the fourth quarter.

Bonus issue

This is probably the first time that a public sector company has declared a bonus issue within six months of listing.

The public sector general insurer’s net profit declined to ₹336 crore in the fourth quarter against ₹553 crore in the year-ago quarter.

However, in FY2018, the company’s net profit more than doubled to ₹2,201 crore against ₹1,008 crore in FY2017.

The company said the profit for the financial year ended and quarter ended March 31, 2017, was higher by ₹531 crore due to a change in accounting policy for unexpired risk reserves.

The insurer’s board recommended a final dividend of ₹5 per equity share of face value of ₹5 each on the current equity shares of the company. The total dividend (interim + final) for the year 2017-18 would be ₹8.75 per equity share.

In the reporting quarter, the premium earned (net) was 4 per cent lower at ₹5,215 crore against ₹5,428 crore in the year-ago quarter. Income from investment was up 14 per cent at ₹845 crore (₹741 crore in the year-ago quarter).

Commissions and brokerage (net) jumped 50 per cent at ₹602 crore in the reporting quarter against ₹401 crore in the year-ago quarter. Claims paid were up 6 per cent at ₹4,494 crore in the reporting quarter against ₹4,238 crore in the year-ago quarter.

G Srinivasan, Chairman and Managing Director, said the profit for the year more than doubled due to a substantial improvement in the operating performance of the company.

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