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.
This will be the fourth-largest IPO ever in the history of Indian capital markets after Coal India, Reliance Power and General Insurance Corporation (GIC Re).
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 contribute more than 40 per cent of the business, New India gets close to a fourth of its business from brokers. The company also has partnership with several state and central government organisations to provide customised insurance products.