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This
will be the fourth-largest IPO ever in the history of Indian markets
New India
Assurance, country's largest general insurance company, will launch
its Rs 9,600-crore initial public offering (IPO) on November 1. The price
band for the issue has been fixed at Rs 770 to Rs 800.
This will be the
fourth-largest IPO ever in the history of Indian capital markets after Coal India, Reliance Power and General
Insurance Corporation (GIC Re).
The issue comprises
of a fresh issue of Rs 1,920 crore and an offer for sale (OFS) of Rs 7,680
crore by the government of India. Retail investors are being offered a discount
of Rs 30 per share (3.7 per cent on the upper price band).
Market participants
say the issue will be a good bet for the investors as New India is the industry
leader in the non-life segment in terms of market share, premium and
also distribution network. The company commands a market share of 15 per cent
in the overall general insurance space. New India has assets worth
Rs 69,000 and also has a healthy solvency ratio of 2.27 per cent. The gross
premiums of the insurer have grown more than 15 per cent CAGR in
the last five years.
Kotak Mahindra,
Axis Capital, IDFC Bank, Nomura and Yes Securities are the
book running managers for the issue.
New India has close
to 2,500 offices across the country and its distribution network comprises of
68,389 agents, data from the offer document said. While the direct channel of
agents contribute more than 40 per cent of the business, New India gets close
to a fourth of its business from brokers. The company also has
partnership with several state and central government organisations to provide
customised insurance products.
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