ICICI Lombard, the General Insurance Company made a languid debut on BSE this Wednesday selling their shares at discount price of Rs. 650 reduced from Rs. 661 per share. During the period of September 15 to September 19 the share price of ICICI Lombard was Rs. 651- Rs. 661 as per the initial public offer [IPO].
ICICI Lombard General insurance is basically a joint venture between the leading ICICI bank and Canadian NRI Prem Watsa-promoted Fairfax Financial Holdings. It is the largest private-sector nonlife insurer in India on the basis of the direct premium income as well as the company that is known for maintaining its position.
Initial Public Offering Of ICICI Lombard General insurance
Initially, the public offering for ICICI Lombard General insurance was up to 8,62,47,187 equity shares. This equity share comprised of the offer that was set for sale of up to 3,17,61,478 shares by ICICI Bank and the sale for 5,44,85,709 was dedicated to FAL corporation for sale.
Subscription Rates of the ICICI Lombard General insurance Share
This very first general insurance company issue of Rs. 5,700 Crore had a good response in the market, receiving a lot of investors and the 3 times subscription rate. Where the subscriptions made under the reserved portion of qualified institutional investors was oversubscribed by 8.17 times there, the retail category subscription went up to 1.22 times. Not only this but the non-institution investor subscription were also remarkable at 0.82 times subscriptions.
Where ICICI is working on it, there Fairfax Financial Holdings sold 12.2% of its stake in the company to private firms at Rs. 2,470 Crore in May yielding the worth of firm to count for Rs 20,000 Crore. According to the analysts, the IPO demanded the market cap of Rs. 30,0000 crore that was 50% premium to the May deal. Although the expectations of the Analysts were not so great, the valuation factored in the positives and listing gains were remarkable.
As per the Centrum Broking ICICI Lombard’s valuation was quite appealing considering the RoE [Return on Equity] of 17.2% for FY this March 2017. The Loss ration in March 2017 was 80.6% and the combined ratio was 104% that was quite lower than the average of private peers.