Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
IPO News

| More

The New India Assurance Company Ltd - IPO Note - Angel Broking

Posted On: 2017-10-31 20:01:04

The New India Assurance Company Ltd (NIA) is the leader in the non-life insurance in India, controlling hefty 15% market share in terms of gross direct premium (Rs. 23,230cr). It issued 27.10 million policies across all product segments. NIA is also market leader in Fire, marine, Motor & health insurance with market share of 19.1%, 21.1%, 15.1% and 18.4%, respectively. As of June 30, 2017, NIA distribution network in India included 68,389 individual agents and bancassurance arrangements with 25 banks in India. The company has developed a pan-India branch network. As on 1QFY2018, NIA had an investment book worth Rs. 55,028cr on which company has been able to generate yield of 8.1% for FY2017.

Positives: a) Established brand and market leadership in Fire, Marine, Motor & Health insurance; b) Longstanding global footprint and successful international operations; c) Multi-channel distribution network; d) Capitalizing on lower penetration of non-life insurance in India.

Investment concerns: a) Though NIA is market leader in terms of gross direct premium but it reports loss in the insurance business (unprofitable underwriting). The combined ratio has consistently remained high for last 5 years at more than 115% and for FY2017 company reported combined ratio of 120%; b) it has been reporting subdued ROE, average ROE for last 5 years is 9% and for FY2017 - 7%; c) Declining interest rate would impact interest income on debt investment.

Outlook & Valuation: At the upper price band of Rs. 800 the issue is offered at 5x FY2017 book value and 76x FY2017 EPS. Its listed peer ICICI Lombard is trading at 8x FY2017 book value and 48 times FY2017 EPS. ICICI Lombard reported decent ROE of 17% and average ROE for last 5 years is 19%, while NIA reported subdued ROE of 7% for FY2017 and average ROE of 9%. NIA's combined ratio is consistently higher than 115%, which is impacting the profitability of the company. Considering the subdued ROE, inconsistent PAT and higher combined ratio, we recommend NEUTRAL rating on the issue.

Source: Equity Bulls

Click here to send ur comments or to

Other Headlines:

Alpahlogic Techsys IPO oversubscribed 1.18 times on the final day of bidding

Alphalogic Techsys IPO receives overwhelming response, oversubscribed on second day of bidding

Start-up IPO Alpahlogic Techsys subscribed 64% On the First day of bidding

India's First Start-up IPO Opens today

Alphalogic Techsys IPO now to open in Aug 26th, 2019

Alphalogic Techsys Limited IPO to open on August 23, 2019

Alphalogic Techsys Limited to be the First Company to be Listed on BSE Startup Platform

Ujjivan Small Finance Bank Ltd files DRHP with SEBI for IPO

Global solar EPC major Sterling and Wilson Solar's Rs 3,125 cr IPO opens on August 6, 2019

Tamil Nadu - based Annai Infra Developers Ltd. gets SEBI approval to float IPO

Maharashtra Finance Minister Unveils DRHP of Alphalogic Techsys Limited for Rolling Out its IPO

K.P.R. Agrochem IPO withdrawn: Angel Broking

Shyam Steel Industries Limited files DRHP for IPO

White Organic Retail Ltd IPO opens on BSE SME platform

TN-based Annai Infra Developers Limited files document for IPO float

Rail Vikas Nigam Limited's IPO to open on Friday, March 29, 2019

Humming Bird Education IPO fully subscribed

Humming Bird Education IPO Opens on March 15

MSTC Limited's IPO to open on Wednesday, March 13, 2019

Anmol India Ltd IPO fully subscribed on Day 3

KPI Global Infrastructure's Rs. 40 crore mops subscription of Rs. 436 Crore

Initial Public Offer: Garden Reach Shipbuilders & Engineers - Kotak

Initial Public Offer: Dinesh Engineers Ltd - Kotak

Subscription for Kritika Wires Ltd IPO open

Garden Reach Shipbuilders & Engineers Ltd IPO extended, price band revised

IPO of Spectrum Electrical Industries Limited Opens on September 17, 2018

Ahlada Engineers IPO opens for subscription on Sep 11, 2018

Rajshree Polypack Ltd NSE SME IPO to open for subscription on Sep 10, 2018

Marquee investor, Sunil Singhania's Abakkus Growth Fund - 1 invests in Rajshree Polypack Limited as Anchor Investor

Equity shares of CreditAccess Grameen Limited to list on Aug 23, 2018

TCNS Clothing Company Ltd to list on July 30, 2018

HDFC AMC IPO receives subscription of 83.04 times

HDFC Asset Management Co - IPO Note - Angel Broking

TCNS Clothing Company Limited - IPO Note - Angel Broking

Rajnish Wellness Ltd IPO to hit markets on June 25, 2018

Varroc Engineering Limited IPO to open for subscription on June 26, 2018

RITES Limited IPO receives overwhelming response from investors

Fine Organic Industries Limited IPO receives subscription of 8.99 times

Varroc Engineering Ltd - IPO Note - Angel Broking

RITES Ltd - IPO Note - Angel Broking

Fine Organic Industries Ltd - IPO Note - Angel Broking

Avana Logistek Ltd files DRHP with SEBI for IPO

IndoStar Capital Finance Ltd - IPO Note - Angel Broking

IndoStar Capital Finance Limited Offer opens on May 9, 2018

IPO Note - SoftTech Engineers Ltd - Arihant Capital Markets Ltd

Hindustan Aeronautics Ltd to list on March 28, 2018

Expectations high on listing of Bandhan Bank shares tomorrow

Mishra Dhatu Nigam Limited IPO receives subscription of 1.21 times

Lemon Tree Hotels Limited - IPO Note - Angel Broking

Mishra Dhatu Nigam Ltd - IPO Note - Sushil Finance

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019