New India Assurance Company IPO subscribed 1.07 times on Day 2

Initial public offer of The New India Assurance Company (NAICL) got subscribed 1.07 times on the second day of offer till 5.30 pm (IST).

The Rs 9,600 crore IPO has received bids for 12,87,66,114 shares against 12,00,00,000 shares offered by the company, data available with the NSE showed.

Quota reserved for qualified institutional buyers (QIBs) has already oversubscribed by over 2.13 times till November 1, whereas portion reserved for non-institutional investors subscribed 2 per cent and retail investors by 2 per cent.

The company has fixed a price band of the public offer at Rs 770-800 per equity share. The issue will close on Friday.

Incorporated on July 23, 1919 at Mumbai, The New India Assurance Co. Ltd (NIACL) is the oldest (in operation for almost a century) and largest general insurance company in India. The company was nationalized by the GoI on January 1, 1974.

BP Wealth has given ‘Subscribe’ to the issue. “NAICL has gained market share in the motor insurance segment and with the emission norms and GST coming into picture, we expect a rise in premiums from the motor segment. At upper price band, the issue is priced at P/B of 4.9x (Q1FY18) and PE of 78x (FY17) post issue. The company has received premium valuations justified in context of huge growth potentials of non-life segment and leadership positioning,” BP Wealth said.

On the other hand, Angel Broking said, “Considering the subdued ROE, inconsistent PAT and higher combined ratio, we recommend ‘Neutral’ rating on the issue.”