 "ICICI Lombard")
Shares of ICICI Lombard General Insurance Company has moved higher by 2% to Rs 912 per share on the BSE in an otherwise weak market. The stock was trading close to its 52-week high of Rs 936 touched on September 17, 2018, in intra-day trade.
In past one week, the stock of general insurance company has outperformed the market by gaining 14% after the private equity investor Warburg Pincus on Friday sold nearly three percentage point stake in the company through the open market. In comparison, the S&P BSE Sensex was down 2% during the same period.
On Friday, November 30, Red Bloom Investment Ltd, an entity owned by funds of Warburg Pincus sold a total of 13.27 million shares, representing 3.14% holding in ICICI Lombard at a price of Rs 800 per share, the BSE bulk deal data shows. The name of the buyers not ascertained immediately.
As of 30 September, Warburg Pincus held a 9% stake in ICICI Lombard General Insurance, the shareholding pattern data shows.
ICICI Lombard has two major shareholders. One is ICICI Bank (55.9%) and the other is Fairfax Asia Limited (FAL) (9.9%). According to Mint report, FAL is to sell its 9.9% stake in ICICI Lombard, following its earlier sell down during the IPO (12.2%, Sep 2017).
Analysts at JP Morgan rate ICICI Lombard ‘Neutral’ primarily owing to its premium valuation (7.0x FY19E P/B or 37x P/E) as compared to New India Assurance (OW) which is trading at 1.9x P/B.
“We would not read this potential event negatively as we think it would remove a key overhang for the stock. Also, we do not think that FAL’s potential stock disposal signals that ICICI Lombard’s value is at peak even on a longer-term perspective. Instead, our understanding is that FAL is passionate about India’s insurance market and it is intending to build a platform in India via GoDigit, an online insurance company with larger ownership,” the brokerage firm said in a report dated November 30, 2018.
The better-than-expected underwriting performances consistently maintaining its combined ratio below 100% with further improvement potential; better pricing cycle (or premium hike) in the motor third party (TP) and the retail and the group health insurance; and positive regulatory developments in broad insurance pricing and sales commissions are the upside risks for the stock, the brokerage firm said.
At 11:57 am; ICICI Lombard was trading 2% higher at Rs 906 on the BSE, as compared to a 1% decline in the S&P BSE Sensex. A combined 209,788 equity shares changed hands on the counter on the BSE and NSE so far.
In past one week, the stock of general insurance company has outperformed the market by gaining 14% after the private equity investor Warburg Pincus on Friday sold nearly three percentage point stake in the company through the open market. In comparison, the S&P BSE Sensex was down 2% during the same period.
On Friday, November 30, Red Bloom Investment Ltd, an entity owned by funds of Warburg Pincus sold a total of 13.27 million shares, representing 3.14% holding in ICICI Lombard at a price of Rs 800 per share, the BSE bulk deal data shows. The name of the buyers not ascertained immediately.
As of 30 September, Warburg Pincus held a 9% stake in ICICI Lombard General Insurance, the shareholding pattern data shows.
ICICI Lombard has two major shareholders. One is ICICI Bank (55.9%) and the other is Fairfax Asia Limited (FAL) (9.9%). According to Mint report, FAL is to sell its 9.9% stake in ICICI Lombard, following its earlier sell down during the IPO (12.2%, Sep 2017).
Analysts at JP Morgan rate ICICI Lombard ‘Neutral’ primarily owing to its premium valuation (7.0x FY19E P/B or 37x P/E) as compared to New India Assurance (OW) which is trading at 1.9x P/B.
“We would not read this potential event negatively as we think it would remove a key overhang for the stock. Also, we do not think that FAL’s potential stock disposal signals that ICICI Lombard’s value is at peak even on a longer-term perspective. Instead, our understanding is that FAL is passionate about India’s insurance market and it is intending to build a platform in India via GoDigit, an online insurance company with larger ownership,” the brokerage firm said in a report dated November 30, 2018.
The better-than-expected underwriting performances consistently maintaining its combined ratio below 100% with further improvement potential; better pricing cycle (or premium hike) in the motor third party (TP) and the retail and the group health insurance; and positive regulatory developments in broad insurance pricing and sales commissions are the upside risks for the stock, the brokerage firm said.
At 11:57 am; ICICI Lombard was trading 2% higher at Rs 906 on the BSE, as compared to a 1% decline in the S&P BSE Sensex. A combined 209,788 equity shares changed hands on the counter on the BSE and NSE so far.
