New India Assurance IPO may see valuation of Rs 70000 crore

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New India Assurance IPO may see valuation of Rs 70000 crore

State-owned New India Assurance - the country's largest non-life company -is set to hit the capital market with a Rs 10,500-crore initial public offer (IPO) by December.

The government, which owns almost 100% stake in the company, will get three years from the date of listing to meet the minimum public shareholding norm of at least 25% public float. Post the IPO, the central government's stake in GIC Re will come down by 14.22 per cent, according to the DRHP.

Last month ICICI Lombard General Insurance filed its DRHP to become the first nonlife insurance company to file for a public offering.

Prior to it, the national reinsurer, GIC Re had filed DRHP for public listing before the capital markets regulator Sebi on Monday. The listing would see the government's stake fall to 75 percent from the current 100 percent.

Kotak Mahindra Capital, Axis Capital, IDFC Bank, Nomura Financial Advisory and Securities (India) and Yes Securities are financial advisers to the IPO.

Other names include HDFC Standard Life Insurance Co, ICICI Lombard General Insurance Co and Reliance General Insurance Co.

Last week, SBI Life Insurance filed for an IPO, which will see the State Bank of India and its joint venture partner BNP Paribas selling 80 million and 40 million shares, respectively, aggregating 12 per cent stake.

The offer size is estimated at Rs 9,500-9,600 crore ($1.48-1.5 billion).

The networth of the company, including fair value of investments, is Rs 34,716 crore at the end-March 31.

It offers general insurance as well as cover for threats from accidents such as fire, engineering, aviation, liability, marine, motor and health insurance. It is the market leader in each of the product segment. As of June 2017, New India operates in 28 worldwide jurisdictions through a number of global branches, agency offices, subsidiaries and associated companies. As of June 2017, their distribution network included 68,389 individual agents and 16 corporate agents.

NIA has reported a net profit at Rs 1,008 crore in fiscal 2017, up 22 per cent over fiscal 2016, driven by investment income which whittled down the high underwriting losses.

The company on Wednesday filed the offer document to sell about 12 crore shares, or 15 per cent of the company, according to the prospectus.

"Listing will open the way for the companies to raise resources from the capital market to meet their fund requirements to expand their businesses, instead of being dependent on the government for a capital infusion", the finance ministry had said on January 18. Analysts are valuing the company at around Rs 70,000 crore, given its net worth of close to Rs 36,000 crore.

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