GIC Re to raise Rs 11,000 crore via IPO
ET Bureau|
Updated: Oct 06, 2017, 08.27 AM IST
GIC Re will raise Rs 11,370 crore by selling 14.22 per cent through an initial public offering, valuing the company at close to Rs 80,000 crore. The issue will help the state-run reinsurer to augment its capital position and expand its business.
This is the second-biggest IPO since Coal India, which had raised Rs 15,200 crore in October 2010. The company has set a price range of Rs 855-912 a share for its IPO, which will run from October 11-13, and the company is likely to list on October 25. GIC Re said it will offer a discount of Rs 45 per share to retail investors and eligible employees. Investors can bid for a minimum of 16 shares and in multiples of 16 thereafter. The government will be selling 10.75 crore shares in the IPO, whereas GIC Re will sell 1.7 crore shares.
As per the filing, the reinsurer will sell 14.22 per cent of the company's stake during the IPO, and will look to sell 25 per cent stake in the next three years. The company has a paid-up capital of Rs 430 crore and a solvency ratio of 2.41 per cent.
“This issue will help us improve solvency margin and grow business,“ said Alice Vaidyan, chairman and managing director GIC Re. “Our solvency has come down to 2.4 per cent (as on March 2017) from 3.8 per cent (as on March 2016) as we expanded crop insurance. We will need capital to support growth, going forward.“
The company has also improved its underwriting performance: its combined ratio was 100.2 per cent at the end of March 31, 2017, down from 107 per cent in the previous year.
This is the second-biggest IPO since Coal India, which had raised Rs 15,200 crore in October 2010. The company has set a price range of Rs 855-912 a share for its IPO, which will run from October 11-13, and the company is likely to list on October 25. GIC Re said it will offer a discount of Rs 45 per share to retail investors and eligible employees. Investors can bid for a minimum of 16 shares and in multiples of 16 thereafter. The government will be selling 10.75 crore shares in the IPO, whereas GIC Re will sell 1.7 crore shares.
As per the filing, the reinsurer will sell 14.22 per cent of the company's stake during the IPO, and will look to sell 25 per cent stake in the next three years. The company has a paid-up capital of Rs 430 crore and a solvency ratio of 2.41 per cent.
“This issue will help us improve solvency margin and grow business,“ said Alice Vaidyan, chairman and managing director GIC Re. “Our solvency has come down to 2.4 per cent (as on March 2017) from 3.8 per cent (as on March 2016) as we expanded crop insurance. We will need capital to support growth, going forward.“
The company has also improved its underwriting performance: its combined ratio was 100.2 per cent at the end of March 31, 2017, down from 107 per cent in the previous year.
