New India Assurance IPO subscribed 1.07 times by Day 2
03 November 2017
The initial public offer (IPO) of New India Assurance (NIA) was subscribed 1.07 times on Thursday, the second day of the issue, with investors bidding for 128.7 million shares against 120 million shares on offer.
Qualified institutional buyers (QIBs) bid for 125.7 million shares against 58.2 million shares on offer. High net worth individuals (HNI) bid for 61.7 million shares against 17.4 million shares on offer. Retail investors bid for 2.09 million shares against 40.7 million shares on offer. Employees bid for 2.93 lakh shares against 3.6 million shares on offer.
The New India Assurance, India's largest general insurance company, has set a price band of Rs770-800 for its initial public offer. When calculated at the upper band, the company could raise up to Rs9,600 crore.
The issue closes today (3 November).
The offer comprises a fresh issue of 24 million shares and offer for sale of up to 96 million shares by the government. Retail investors and employees of the company will receive a discount of Rs30.
NIA'a issue follows last month's share sales by SBI Life and ICICI Lombard, which had raised Rs8,400 crore and Rs5,700 crore, respectively, through IPOs. General Insurance Corporation (GIC Re), the only Indian reinsurer, also raised Rs11,372 crore in the second week of October.
The NIA IPO is also part of the government's disinvestment programme. According to a red herring prospectus (RHP), as of 31 March 2017, the company had issued 27.10 million policies across all their product segments, including fire insurance; marine insurance, motor insurance, crop insurance, health insurance and other insurance products.
In FY17, the company's gross written premium was Rs23,230 crore against Rs19,227 crore in the previous year. Its gross written premium increased at a compounded annual growth rate (CAGR) of 15.18 per cent from FY13 to FY17. The company posted a net profit of Rs839.8 crore in FY 17.