The country’s largest non-life insurer New India Assurance’s Rs 9,600 crore initial public offering (IPO) will open on November 1 and close on November 3. The price band has been fixed at Rs 770 to Rs 800 per share. A discount of Rs 30 on the offer price is being offered to retail individual investors and to eligible employees in the employee reservation portion.

The IPO will comprise 12 crore shares of which there is a fresh issue of up to 2.4 crore equity shares and an offer for sale of up to 9.6 crore equity shares.

At the upper end of the price band, the IPO will fetch the government Rs 7,680 crore while the insurer could reap a gain of Rs 1920 crore. The offer shall constitute 14.56 per cent of the post-offer paid-up equity capital of the company. At Rs 9,600 crore for a 14.56 per cent stake, the insurance company has been valued at almost Rs 66,000 crore.

Speaking to reporters at the IPO press conference G Srinivasan, chairman-cum-managing director, New India Assurance said the insurer proposes to utilise the net proceeds of the fresh issue towards meeting future capital requirements which are expected to arise from the growth and expansion of business, improving solvency margin and consequently solvency ratio of the company.

Srinivasan said that the insurer is focussing on several measures to reduce the underwriting losses such as raising the premium rates in individual and corporate health insurance products. The health insurance claims ratio last year was 114 per cent, which the company plans to slash this year.

In the last few months, two insurers, SBI Life Insurance, ICICI Lombard General Insurance, and reinsurer GIC Re have got listed.

For the June quarter, New India Assurance had a RoE of 16 per cent and a net profit of Rs 520 crore. Its Combined Ratio improved to 110.66 per cent from 119 per cent last year.

falaknaazsyed@mydigitalfc.com