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IPO Review – General Insurance Corporation of India

General Insurance Corporation of India is the largest reinsurance company in India in terms of gross premiums accepted in Fiscal 2017, and they accounted for approximately 60% of the premiums ceded by Indian insurers to reinsurers during Fiscal 2017, according to CRISIL Research.  General Insurance Corporation of India is also an international reinsurer that underwrote business from 162 countries as at March 31, 2017.

According to CRISIL Research, General Insurance Corporation of India ranked as the 12th largest global reinsurer in 2016 and the 3rd largest Asian reinsurer in 2015, in terms of gross premiums  accepted.  General Insurance Corporation of India provides  reinsurance  across  many  key  business  lines  including fire  (property),  marine,  motor, engineering, agriculture, aviation/space, health, liability, credit and financial and life insurance. With 45 years of experience, company has become a trusted brand to insurance and reinsurance customers in India and overseas.

 Financials For Last 4 Years

Particulars For the year ended (in Rs. million)

31-Mar-17  31-Mar-16    31-Mar-15      31-Mar-14     31-Mar-13
Total Assets 485,269.54  406,375.76    430,986.15 332,005.86 281,390.59
Total Revenue  36,441.79         32,340.78    30,995.34 26,985.09 25,111.20
PAT 28,578.52 26,549.18    28,026.85 23,218.42 22,888.64

Issue Detail of General Insurance Corporation of India 

  • Issue Opens: October 11, 2017 Issue Closes: October 13, 2017 
  • Issue Size: 124,700,000 Equity Shares of Rs 5 aggregating up to Rs 11,372.64 Cr 
  • Face Value: Rs 5 Per Equity Share Issue Price: Rs 855 – Rs 912 Per Equity Share 
  • Minimum Order Quantity: 16 Shares 
  • Finalisation of Basis of Allotment: On or about October 18, 2017 
  • Initiation of refunds: On or about October 23, 2017 
  • Credit of Equity Shares: On or about October 24, 2017 
  • Commencement of trading: On or about October 25, 2017 
  • Listing At: BSE, NSE 

Our Verdict

On consolidated basis General Insurance Corporation of India has posted an average EPS of Rs. 34.81 and average RoNW of 16.61% for last 3 years. Issue is priced at a P/BV of 3.89 and at a P/E of around  P/E of 32.

Since there is a discount for retail investors, it would probably give a listing gain of 10 percentage.  If you have extra fund, go for it.Disclosure: I am not applying for GICI.

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