General Insurance Corporation IPO Details

October 11, 2017

  1. About GIC
  2. International Operations of GIC
  3. Ratings of GIC
  4. Key Highlights of GIC
  5. Financial Highlights or Financial Performance of GIC
  6. GIC Re IPO Details
  7. Objective of IPO
  8. Book Running Lead Managers of GIC

About General Insurance Corporation (GIC)

GIC Re is a sole re-insurance company (until late 2016), with its registered office and headquarters located in Financial Capital of India, Mumbai. GIC was established on 22nd November 1972 under the Companies act, 1956 and was formed as per the section 9(1) of GIBNA (General Insurance Business Nationalization Act, 1972) as a private company limited by Shares.

Reinsurance is an insurance purchased by an insurance company from different insurance firms in order to manage risk.

GIC was incorporated with an objective of controlling, managing and operating the business of all general insurances in India. Today, it is also a leading reinsurance company as well as a risk solution provider. GIC Re is responsible to write re-insurance for every non-life and over-life of the life insurance companies in India. It also gets the statutory cession of 5% on each and every policy subject to specific limits.

GIC has four soley owned subsidiaries namely

• National Insurance Company Limited
• New India Assurance Company Limited
• Oriental Insurance Company Limited
• United India Insurance Company

Following Chart gives the list of capacity of each class of domestic business

Gic Domestic Business

International Operations of GIC

In last few years, GIC Re has expanded globally as Re-Insurer among SAARC Countries, Africa, Europe, America, Southeast Asia as well as Middle East. It manages its international operation through its offices located in London, Dubai, KaulaLampur and Moscow.

Also Read – Can Retail Investor Subscribe to IPO

Ratings of General Insurance Corporation (GIC)

• GIC Re received a rating of A- (Excellent) from A. M. Best based on its financial strength.
• In 2014, Russian National Rating Agency (NRA) rated ‘AAA’ Reliability Rating on National Scale to GIC Re.
• In 2014, Russian National Rating Agency (NRA) rated ‘iA-’ Credit Ratingon Global Scale to GIC Re.
• In 2012, S&P Ratingsranked GIC Re as 14th largest Re insurer and 4th largest Aviation Re insurer in the world.

Key Highlights of General Insurance Corporation (GIC)

• GIC Re ranked 12th among the top global re-insurers based on Gross Written Premium
• GIC Re is the largest Agricultural Reinsurer
• GIC Re is the 4th largest Aviation Reinsurer
• GIC Re is noted as a leader in SAARCH and Afro Asian Market
• GIC Re is also the manager of India Nuclear Insurance Pool and Terrorism Insurance POOL
• GIC Re is rated as A- (Excellent by A M Best & Co.)

Financial Highlights or Financial Performance of GIC Re

The following table gives a summary of key financial highlights of GIC Re over the period of 2013 – 2017.
Particulars For the year/period ended (in Rs. million)
GIC turnover The above table illustrates a rapid increase in Total Asset over the period 2013 to 2017 where the Total Revenue and Profit after tax also gradually increase over the same period of years.

GIC Re’s gross premium showed a significant growth at CAGR of 24.84 % in FY2015-FY2017 whereas on a consolidated basis, the growth is at CAGR of 48.65 %. {CAGR – Compounded Annual Growth Rate} Also PAT (Profit after tax) has grown at a 4.23 % annually over the same period (ETMarkets, 2017).

GIC Re IPO Details

Objective of IPO – GIC Re intends to utilize the net proceeds of the fresh issue towards augmenting the capital base of the corporation to support the growth of the business and to maintain current solvency levels and General corporate purposes, subject to applicable law (ETMarkets, 2017).

Issue Open Dates11th Oct 2017 (Wednesday) – 13th Oct 2017 (Friday)
Face ValueRs 5 per Equity Share
Issue Price Rs.855 – Rs.912 per Equity share
Market Lot Size16 Shares
1 Lot Investment RangeRs.13,680 – Rs.14,592
Listing atBSE and NSE
Type of the IssueBook Built Issue IPO
Size of Issue124,700,000 Equity Shares of Rs 5 aggregating up to Rs 11,372.64 Cr
• Fresh Issue of 17,200,000 Equity Shares of Rs 5
• Offer for Sale of 107,500,000 Equity Shares of Rs 5
Discount OfferGIC Re will offer discount of Rs 45 per share to retail investor and eligible employees.
Key Business Segments for RevenueRe-insurer in Agriculture (29%), Fire (24%), Motor (20%), Health (12%), Marine (3%), Engineering (3%), Life (1%), Others (8%)
Promoter of GIC RePresident of India through Ministry of Finance.
Finalization of Basis of Allotment (Tentative)On or about 18th October, 2017 (Expected Date)
Initiation of Refunds (Tentative)On or about 23rdOctober, 2017 (Expected Date)
Credit of Equity shares to DEMAT Account (Tentative)On or about 24thOctober, 2017 (Expected Date)
Commencement of trading of Equity shares (Tentative)On or about 25thOctober, 2017 (Expected Date)

Book Running Lead Managers of GIC Re

• Citigroup Global Markets India Private Limited
• Axis Capital Limited
• Deutsche Equity India Private Limited
• HSBC Securities and Capital Markets (India) Private Limited
• Kotak Mahindra Capital Company Limited

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