Opinion Poll

Headline : ICICI Lombard recovers after a weak debut at BSE, opens at Rs 646 against issue price of Rs 661
News Date : Sep 27, 2017
Source : AIP News Bureau
Positive signals for the IPOs GIC Re, New India Assurance


Shares of  the country’s largest private sector non-life insurer, ICICI Lombard General Insurance Company, the first general insurer to be listed in bourses, recovered after a weak debut at BSE and were trading nearly 3% higher. 

They had opened 1.66% lower on the BSE at Rs 646  apiece, compared to the issue price of Rs 661, which was the upper end of the price band between Rs 651-Rs 661 per share.

At 12.20pm, they were up 2.87% at Rs 680, while Sensex traded 0.59% lower at 31,412.55 points. Earlier in the day, the stock touched a high of Rs 694 and a low of Rs 638.15 respectively.

The initial share sale offer of the company was oversubscribed 2.4 times during September 15-19 excluding anchor allocation. Including anchor allocation, it was oversubscribed by 2.97 times.

Analysts said the IPO of the ICICI Lombard General Insurance has sent positive signals for other general insurers like New India Assurance, which will be launching its IPO shortly.

GIC Re, country’s largest state owned reinsurer will also launch its IPO next month. GIC Re after completing its IPO roadshows in overseas markets, has started its road show in the country today.

Market analysts expected unlike ICICI Lombard General Insurance,which was priced high, the state owned NIA and GIC would be moderately priced

ICICI Lombard General Insurance was set up in 2000 with the partnership between ICICI Bank and Canadian NRI Prem Watsa-promoted Fairfax Financial Holdings.

However. the joint venture just before the IPO has been dissolved as Watsa has decided to set up another general insurance company – Go Digit- along with the partnership of Kamesh Goyal, whohad worked with Bajaj Allianz General Insurance and Allianz.

In a bid to comply with regulatory requirements , Fairfax has brought down its stake to 9.9 per cent from 36 per cent in ICICI Lombard General Insurance in two phases in last four months. 

However, ICICI Lombard will continue to have Lombard as its brand name for quite some time.

“ICICI Lombard will keep creating value for its shareholders in the long run,” Chanda Kochhar, managing director of ICICI Bank said.

“Even though Fairfax has become a minority stakeholder in company now by bringing down its stake to less than 10 per cent in ICICI Lombard, the brand name ‘Lombard’ has been transferred to us and hence we will continue to have it for some time before we take any further call on the issue,” Bhargav Dasgupta  ICICI Lombard managing director and chief executive told PTI here today.

Replying to a query if ICICI Lombard would allow Fairfax, which owns 49 per cent in Go Digit, he said “we have no issues.”

On the underwriting loss of the company, Dasgupta said that ICICI Lombard’s combined ratio has come down to 102 per cent at end-June from 104 per cent as on end-March.

“We will try to bring it close to 100 per cent in future,” he said.
Talking about consolidation happening in the industry, he said that there is a scope for consolidation as lots of changes happening in the industry. It was visible with the fact that change of ownership happening in the industry.
The company has been valued at Rs 30,000 crore and it closed the April-June quarter with a net profit at Rs 200 crore, up by 50 per cent on year-on-year basis.

ICICI Lombard’s total premium grew 15 per cent at Rs 3,000 crore in the June-quarter.




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