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The government-owned general insurer, New India Assurance Company Ltd, has filed the draft red herring prospectus with the Securities and Exchange Board of India to list its business through an initial public offering (IPO).
The filing for IPO comes after another state-owned insurer, General Insurance Corporation, filed its draft prospectus on Monday.
New India's IPO will be of 120 million shares, with a face value of Rs 5 each. The offer comprises a fresh issues of 24 million equity shares and an offer of sale of 96 million equity shares, according to the prospectus.
The issue size of the forthcoming IPO of New India Assurance is likely to be more than $1 billion (Rs 6,300 crore), merchant banking sources said. This would constitute 14.56 per cent of the company’s post-issue share capital. The IPO is likely in mid-November.
Combined ratio, which indicates a non-life insurer’s total outflow on its net earned premium, stood at 119.96 in FY17; in FY16, it was 117.99. Solvency ratio, which indicates an insurance company’s financial capacity to meet its short-term and long-term liabilities, was 2.22.
The Insurance Regulatory and Development Authority-approved standard solvency ratio is 1.5.