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.
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 contributes more than 40 per cent of the business, New India gets close to a fourth of its business from brokers.
The company also has the partnership with several states and central government organisations to provide customised insurance products.