New India Assurance IPO Listing Check

New India Assurance IPO Lists At 9.37% Discount

The New India Assurance Company Ltd (NIA) IPO finally listed on NSE and BSE on 13th November 2017. And its investors who have subscribed for listing gain and had got allotment will be not much happy.New India Assurance IPO Listing

As told earlier that people were expecting it to list at some premium.

As We know The New India Assurance Company Ltd IPO subscription figures were also not good in the retail category. So almost all investors have got its shares.

The New India Assurance Company Ltd IPO allotment price is Rs 800 per equity share and was oversubscribed by around 1.19 times. The New India Assurance IPO Lists At Rs 725.05 at closing.

In last several issues while others were really successful IPO’s and given handsome gains on a listing day this IPO does not turn well with the expectations of investors. It made a day high of Rs. 749 and day low of Rs. 717.75 at BSE.

Shares of New India Assurance Co. Ltd (NIA) closed 9.4% below issue price on the company’s first day on the bourses, after an initial share sale that barely scraped through.

After opening at Rs748.90 on the BSE, 6.39% below the issue price of Rs800, NIA shares fell further to close at Rs725.05, down 9.37%. During the day, NIA shares touched a high and a low of Rs749 and Rs717.75, respectively.

Benchmark equity index Sensex shed 0.84% to close at 33,033.56 points.

New India Assurance IPO Listing The state-owned general insurer had priced its shares at Rs770-800 in its Rs9,600 crore initial public offer (IPO), which was subscribed 1.19 times.

Many analysts had recommended avoiding the IPO and questioned its steep valuation, given the relatively lower returns the general insurer offers.

“Insurance sector—there has been an overdose of IPOs in the last 6-8 months,” said Anuradha Thakur, joint secretary, department of investment & public asset management (Dipam) in the ministry of finance.

Of the six insurance companies that were listed in 2017, three are trading below their issue price—including the two state-run companies General Insurance Corporation of India (GIC Re) and NIA.

“I think what we would think is GIC perhaps was the only reinsurance company—may be there was a gap there in terms of understanding the products of the company, and NIA came on very close on the heels of GIC,” Thakur told reporters at an event in Mumbai.

“Immediately, we had HDFC (Standard) Life, too,” she added.

The government is currently working on a plan to list three other state-run general insurers—United India Insurance Co. Ltd, Oriental Insurance Co. Ltd

“We have to get through the IPO for three more, but we will factor this entire sentiment of the market before we come in,” Thakur said, adding the government will look into the timing and price, after assessing the market.

According to the company’s red herring prospectus filed with the markets regulator, NIA’s return on equity (RoE) stood at 8.6% for the fiscal year 2016-17, compared to private peers ICICI Lombard General Insurance Co. Ltd and Bajaj Allianz General Insurance’s 20.3% and 23.1%, respectively.

New India Assurance IPO Listing It reported operating profit for only one out of five fiscal years to 2017. For fiscal years 2016 and 2017, the company reported an operating loss of Rs877.65 crore and Rs486.03 crore, respectively.

Incorporated in 1919, NIA offers insurance products in key business verticals such as fire insurance, marine insurance, motor insurance, crop insurance and health insurance
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