New India Assurance Company, country's largest general insurer, listed at a 6.4% discount over its issue price of Rs 800 on the BSE today.
The stock opened at Rs 748.90 level on the BSE and hit a intra-day high of 749 level.
At 10:25 am, the stock was down 8 percent or 71 points at 729 compared to its issue price.
The Rs 9600 crore IPO was subscribed 1.19 times during its three-day bidding from November 1 to November 3.
The government sold around 12 crore shares or 14.13 percent stake in the insurer through the share sale offer in a price band of Rs 770-Rs 800 per share. 9.6 crore shares were offered in the state-owned insurer besides a fresh issue of 2.4 crore shares.
Qualified institutional buyers (QIBs) category was subscribed 2.34 times, non-institutional investors (12 per cent) and retail investors (11 per cent).
Retail investors and employees received a Rs 30 discount on the price of a share.
Analysts were largely neutral on the issue citing valuation concerns. Under applicable IRDAI regulations, control level solvency ratio of 1.50 is required to be maintained. As of March 31, 2017, the insurer's solvency ratio was 2.22. The solvency ratio is the ratio of the excess of assets over liabilities to the required capital.
In fiscal 2015, 2016 and 2017, the insurer's gross written premium was Rs 16,986.59 crore, Rs 19,227.26 crore and Rs 23,230.49 crore, respectively. The firm's gross written premium increased at a CAGR of 15.18% from Rs 13,200.18 crore in fiscal 2013 to Rs 232,30.49 crore in fiscal 2017.
Its net worth (excluding fair value change account) increased from Rs 9,605.03 crore as of March 31, 2013 to Rs 12,596.44 crore as of March 31, 2017, while its total net worth (including fair value change account) increased from Rs 25,469.81 crore as of March 31, 2013 to Rs 36,298.08 crore as of March 31, 2017.
New India Assurance has assets of over Rs 69,000 crore and has been growing at CAGR of over 15 per cent for the last five years. Kotak Mahindra Capital Company, Axis Capital, Nomura Financial Advisory and Securities (India) Private Limited, IDFC Bank Limited and YES Securities were the book running lead managers to the offer.