New India Appoints Five Bankers for IPO

New India Assurance has selected five investment bankers for its forthcoming initial public offering this year. The largest state-owned non-life insurer is looking at a combination of offer for sale of government's shares and issue of fresh equity. The merchant bankers for the issue are Kotak, Axis Bank, Nomura, IDFC and Yes Bank. The company has begun to prepare the offer document and will announce its financial results in a few days.

Speaking to TOI, New India Assurance chairman G Srinivasan said that the minimum float in an IPO is around 10% while the maximum is 25%, though the extent of dilution is yet to be decided. Given that the company has assets of over Rs 62,000 crore and is targeting global premium of over Rs 25,000 crore in FY18, industry insiders are expecting a float in excess of Rs 5,000 crore. Responding to speculation of merger of government-owned non-life companies, Srinivasan said that there was no concrete move and there has been only unconfirmed news reports. "As far as we are concerned there is no such thing and we are going ahead (with the public issue) in our present structure," said Srinivasan.

In January, the cabinet committee on economic affairs (CCEA) cleared the listing of five state-owned non-life insurance companies — New India Assurance, National Insurance, Oriental Insurance, United India Insurance and GIC Re. The committee also cleared reducing the government's stake in them to 75% from 100%. However, two of the non-life companies are not in a financially sound position and there has been speculation that they may be merged. However, the financial position could change once their results for the current year are announced. "The market has been good for non-life insurers. Even without the inclusion of crop insurance there has been good growth in other segments and premium rates are also improving," said Srinivasan.