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New India Assurance IPO subscribed 1.07 times on second day of bidding

The government is selling 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 are being sold in the state-owned insurer besides a fresh issue of 2.4 crore shares. 

BT Online        Last Updated: November 3, 2017  | 10:34 IST
New India Assurance IPO subscribed 1.07 times on second day of bidding

The New India Assurance initial public offer (IPO) was subscribed 1.07 times on the second day of bidding on Thursday.

The IPO of country's largest general insurance company received bids for 12,87,66,114 shares against the total issue size of 12,00,00,000 shares, data available with the NSE showed.

The IPO which aims to garner Rs 9600 crore at the upper end of its price band closes today.

The government is selling 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 are being sold in the state-owned insurer besides a fresh issue of 2.4 crore shares.  

Qualified institutional buyers (QIBs) category was subscribed 2.16 times, non-institutional investors 4 per cent and retail investors 5 per cent.

Retail investors and employees will get a Rs 30 discount on the price of a share. Analysts are 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 are the book running lead managers to the offer.

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