GIC Re shares list at a 6% discount of Rs857.50 on NSE

Shares of General Insurance Corporation of India (GIC Re) listed at Rs857.50 on the National Stock Exchange today, at a 6-per cent discount to its issue price of Rs912.

At 10:03 am, the share was trading at Rs861.05, down 5.6 per cent from issue price.

The stock did touch a high of Rs867 and low of Rs850 (in pre-opening trade) in early trade.

The Rs11,370-crore initial public offer (IPO) of General Insurance Corporation, which opened for subscription during 11-13 October, was oversubscribed 1.38 times. LIC is reported to have accounted for over 50 per cent of the bids.

The IPO received bids for 17,06,99,808 shares against the total issue size of 12,47,00,000 shares, data available with the NSE showed.

GIC Re, India's only reinsurance company, had fixed the price band at Rs855-912 for its IPO.

The issue proceeds will be utilised for augmenting the capital base to support business growth and maintain current solvency levels; and for general corporate purposes.

The insurance and reinsurance industry is the latest to join the palette of choice for equity investors in recent times

GIC Re is all set to emerge among the top 10 global reinsurers and figure among the 40 largest global corporates, both in terms of market capitalisation.

From its current ranking of 12 largest global reinsurer, the company is set to grow to the 10th spot during the current fiscal, given its healthy growth rate, a market source said.

At present, GIC Re is also the third-largest reinsurer in Asia. Rating agency A M Best said in its global reinsurance review, "Among Asian reinsurers in the list of Top 50 world's largest reinsurance groups, growth was primarily driven by General Insurance Corporation of India (GIC Re) in 2016." It noted, GIC Re posted an 87 per cent growth in its gross premium to $5.2 billion in FY17 compared to FY16, on the back of a big jump in the government-backed crop insurance scheme Pradhan Mantri Fasal Bima Yojana.

It is also likely be the second-largest Indian entity in the financial sector PSU listed space after SBI.

Alongside SBI, GIC Re is the country's leading MNC in the BFSI sector with a global presence - it has branches in London, Dubai, Kuala Lumpur and a subsidiary in South Africa.

Analysts point out that diversification is the key in risk management and GIC Re, writing business from most parts of the world, already has good diversification.

The insurance and reinsurance industry is the latest to join the palette of choice for equity investors in recent times.