New India Assurance Initial Public Offering opens

Venkat Raman

The Initial Public Offering (IPO) of New India Assurance (NIA) Company Limited, the largest general insurance undertaking in India, will open on November 1, 2017.

The Offering will close on November 3, 2017.

Shares Offer Details

Dalal Street Investment Journal said that the wholly-owned Indian Government Undertaking plans to raise INR 10,560 Crores (about $2.37 billion) through fresh issue of 2.4 crore (24 million) shares and offer for sale of 9.6 crore (96 million) shares.

The shares will be issued in the price band of INR 770-880 Crore and retail investors and eligible employees will be given a discount of INR 30 per share. The face value of the share is INR 5 and an investor would need capital of INR 15,840 (about $347) to subscribe for the issue at the minimum lot size of 18 units. With this IPO, the Company will be listed on both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India,” the publication said.

It is understood that Axis Bank, IDFC Bank, Kotak Mahindra Capital, Nomura and Yes Bank are the lead book runners for the issue.

“At the lower end of the price band, New India Assurance will raise INR 1848 Crores. The funds will be used to meet IPO-related expenses and for future growth and expansion in the financial year 2018. The Company has a current solvency ratio of 2.27, which is above the Insurance Regulatory and Development Authority (IRDA) of India requirement of 1.5. The Company also plans to utilise the funds to maintain or improve this ratio post- expansion plans,” Dalal Street Journal said.

Impressive results

As per an Indian Newslink analysis, as at the end of the financial year ending on March 31, 2017, the Company’s written premium was valued at Rs 22,279 Crores (about $4.75 billion) and net worth and fair value placed at Rs 34,716 Crores (about $7.5 billion) globally.

Its asset base was Rs 69,173 Crores (about $14.95 billion) and investments at market value were Rs 53,009 Crores (about $11.45 billion).

Note: The figures quoted in New Zealand Dollars were at the prevailing exchange rate on the day of our Report (July 3, 2017). They are not accurate and rounded off (Swedish Rounding) for simplicity.

Rich Legacy

A Press Trust of India report appearing in The Hindu BusinessLine said that NIA has a rich legacy and sustained its market leadership despite 31 other insurers in the industry.

“In fact, NIA’s market share has increased in the last five years, currently hovering around 16%. India Inc’s top business houses are long-time customers of NIA. The Company is currently the only direct insurer with an International ‘A’ rating and has operations through a desk at Lloyd’s, the world’s largest specialist insurer,” the report said.

Foreign Operations

NIA opened its first overseas office in London in 1920, one year of its inception in India.

Today, it operates in 28 countries through direct branches, agency operations, subsidiary companies, representative offices and associates.

NIA also has equity participation in insurance companies in Singapore, Kenya and Saudi Arabia.

The Company established its presence in New Zealand in 2005, and provides a wide range of innovative products catering to individual customer needs.

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