About
the company -
ICICI Lombard IPO - Maiden IPO by Non-life Insurer
#ICICI Lombard is the largest
private-sector non-life insurer in India based on gross direct premium income
in fiscal 2017, being one of the first
few private-sector companies to commence operations in the sector in fiscal
2002, according to the CRISIL Report. They have well-diversified range of
products, including motor, health, crop/weather, fire, personal accident,
marine, engineering and liability insurance, through multiple distribution
channels. They were founded as a joint venture between ICICI Bank Limited,
India’s largest private-sector bank and Fairfax Financial Holdings Limited, a
Canadian based holding company which, through its subsidiaries, is engaged in
property and casualty insurance and reinsurance and investment management with
US$43.38 billion of total assets at December 31, 2016.
In fiscal 2017, 87.5% of their new
policies were initiated electronically, either by our distributors or customers. No. of policies grew at a CAGR of
13.1% between fiscal 2015 – 2017. Their per employee productivity, measured in
terms of gross direct premium income per employee, increased from Rs. 114 lakh in
2015 to Rs. 166 lakh in 2017, representing a cumulative annual growth rate of
20.7%.
It
enjoys a diverse customer profile base including
large and mid-sized corporates, MSME, central and state governments, and
individuals. In fiscal 2017, our retail (including SME), corporate and
government business groups contributed 60.4%, 17.5% and 22.1% of our GDPI,
respectively. For the three months ended June 30, 2017, our retail (including
SME), corporate and government business groups contributed 54.3%, 23.2% and
22.5% of our GDPI, respectively.
Financial
Performance
In Rs.
Crore
Financial
|
FY 17
|
FY 16
|
FY 15
|
FY 14
|
FY 13
|
Total Assets
|
48,885.8
|
35,445.0
|
32,414.2
|
25,070.8
|
20,290.5
|
Revenue
|
7180.49
|
5804.25
|
5044.81
|
5028.41
|
4487.39
|
Profit
|
667.01
|
481.96
|
558.40
|
412.82
|
302.65
|
%NPA
|
9.2%
|
8.2%
|
10.1%
|
8.11%
|
6.7%
|
Industry
Overview
The Indian non-life insurance sector
offers different products such as motor, health, crop, fire, marine, liability,
travel, aviation and home insurance aimed at meeting different protection needs
of retail customers, government as well as corporate customers.
According to CRISIL Report, The size
of the Indian non-life insurance sector was Rs. 1.28 trillion on a GDPI basis
as of 31st March 2017. Indian non-life insurance sector GDPI grew at a CAGR of
17.4% between fiscal 2001 and fiscal 2017. According to Swiss Re, India was
fifteenth largest market in the world and the fourth largest market in Asia in
2016, behind China, Japan and South Korea. India was also amongst the fastest
growing non-life insurance markets over 2011-2016, growing at 14.5% (as per Swiss
Re). Despite its size and growth profile, India continues to be an
underpenetrated market with a non-life insurance penetration of 0.77% in 2016,
as compared to 1.81% in China, 1.70% in Thailand, 1.67% in Singapore and 1.62%
in Malaysia and a global average of 2.81% in 2016. At US$13.2 in 2016,
insurance density also remains significantly lower as compared to other
developed and emerging market economies.
ICICI lOMBARD ALLOTMENT, lOMBARD ALLOTMENT STATUS, ICICI Lombard IPO
Multi-Product
Insurers:
Four public sector companies offering
multiple products – National Insurance Company Limited (“National Insurance”), The
New India Assurance Company Limited (“New India”), The Oriental Insurance
Company Limited (“Oriental Insurance”) and United India Insurance Company
Limited (“United India”)
o 18 private sector companies offering
multiple products – including ICICI Lombard General Insurance Company Limited (“ICICI
Lombard”), Bajaj Allianz General Insurance Company Limited (“Bajaj Allianz”),
HDFC ERGO General Insurance Company Limited (“HDFC Ergo”), IFFCO Tokio General
Insurance Company (“IFFCO Tokio”) and TATA AIG General Insurance Company (“Tata
AIG”). There are also single product insurers.
Besides these 30 companies, the state
owned General Insurance Corporation of India (“GIC”) operates as the main
Indian reinsurer.
About
the Issue
With the IPO, ICICI Lombard likely to
mobilise upto Rs. 5700 crore, offering 8.62 crore equity shares in a price band
of Rs. 651 to Rs. 661.
IPO
Opening and closing date – Sep 15 –
Sep 19, 2017
Face
value - Rs. 10
Lot
size – 22
Allotment portion
|
Percentage
|
QIB
|
Upto 47%
|
NII
|
14% and above
|
Reserved for ICICI Bank shareholders
|
4%
|
Retail
|
33% and above
|
Shareholding
pattern of promoters post IPO
IPO
Proceeds to be used in – #ICICI
Lombard is the non-life Insurance company to offer IPO. Promoters to dilute 19%
in ICICI Lombard's Rs 5,700-cr IPO. IPO proceeds are not going to the insurers.
It is a pure stake sale by the promoters
Mymoneystreets
Take on the IPO
The company’s has registered revenue growth
of 25% over last five years. Its profits have grown at a CAGR of 65% over last
five years. On the upper price band of Rs 661 for FY17, its PE is at 46 times. IPO
proceeds are not going to the insurers. It is a pure stake sale by the
promoters. The pricing of IPO looks high.
The brand is promising, however, there
are no competitor listed on the bourse. Highly under-penetrated sector likely
to see a robust growth over long term. Subscribe this IPO only if you have a
long term view.
ICICI lOMBARD ALLOTMENT, lOMBARD ALLOTMENT STATUS, ICICI Lombard IPO
