New India Assurance – the largest General Insurance company in India in terms of (1) Net Worth, (2) Domestic Gross Direct Premium, (3) Profit After Tax and (4) Number of Branches is planning to raise INR 9600 crore (1920 crore of Fresh Issue + 7680 crore of OFS) via initial public offer (IPO)
New India Assurance – Company profile
Incorporated in the year 1919, The New India Assurance Company Limited (NIA) is the oldest and largest General Insurance company in India. In was the year 1974 when the company was nationalized by the Government of India.
Working Area
- New India Assurance (NIA), today, is a 100 % Govt owned multinational General Insurance company and its operations were spread across 29 States and seven Union Territories in India and across 28 other countries globally through a number of international branches, agency offices and subsidiaries including a desk at Lloyd’s, London.
- New India Assurance offers insurance in 5 distinct categories including (1) fire insurance; (2) marine insurance, (3) motor insurance, (4) crop insurance, (5) health insurance and other insurance products.
- The Company have over 170 products catering to almost all segments of General Insurance business and provided cover to petrochemical, oil & energy industries, power & steel plants, aviation fleets, satellites, large projects & infrastructures, SMEs and are present in all forms of commercial sector.
- As of March 31, 2017, New India Assurance had issued 2.71 crore policies across all product segments, the highest among all General Insurance companies in India.
Distribution Network
- The Company has built a multi-channel distribution network that includes individual and corporate agents, brokers, bancassurance partners and other intermediaries, as well as direct sales and sales through online channels.
- The Company’s distribution network includes 68,389 individual agents and 16 corporate agents, 25 banks, and a large number of OEM and automotive dealer.
Company Ratings
New India Assurance (NIA) is rated A- (Excellent) by AM Best Company since 2007 and have been rated AAA (Stable) by CRISIL since 2014.
Company Promoters
The Promoter of the company is President of India, acting through the Ministry of Finance.
IPO Opening / Closing Dates & Listing
IPO Details – Issue Price, Minimum Bid and Other
Financial Performance
Revenues
The Company shows steady revenue growth in recent years. Top-line has been increasing regularly for the last 5 years and jumped from INR 11220.30 crore in FY 2013 to INR 20471.40 crore for the period ended FY 2017.
Profits
Though the company has shown steady growth in revenue, the company fails to register steady profit growth in those 5 years. Starting from INR 883.10 crore of profits in FY 2013, the company’s earnings were INR 819.9 crore in FY 2017.
CONCLUSION –
Considering company’s valuation and financial parameters, FinBlab recommends NEUTRAL ratings on The New India Assurance Company IPO for the time being.
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