ICICI Lombard is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017, a position they have maintained since fiscal 2004 after being one of the first few private-sector companies to commence operations in the sector in fiscal 2001.
Issue Details of Matrimony.com Limited IPO:
- IPO Open: 15th Sep – 19th Sep 2017
- Issue Price band: Rs 651 – Rs 661
- Issue Size: Rs 5700 crore
- Market lot: 22 shares
- Minimum Investment: 14542 (Rs 661 per share)
- Max Investment for Retail Investor – 286 shares
- Book Running Lead Managers: CLSA
- Registrar: Karvy
- Listing: BSE/NSE
IPO Issue Allocation:
- Qualified institutional buyers (QIBs) – 75% of the offer.
- Non-institutional bidders – 15% of the offer.
- Retail individual bidders – 10% of the offer.
Background:
ICICI Lombard General Insurance Company Ltd. (ILGIC) was founded as a joint venture between ICICI Bank Ltd., India’s largest private sector bank (in terms of consolidated total assets) and Fairfax Financial Holdings Ltd., a Canadian based holding company engaged in property and casualty insurance and re-insurance and casualty management.
ILGIC is the largest private sector non-life insurer in India based on gross direct premium income since FY04 after commencing operations in FY02.
The company has a market share of 18% in the private sector and an overall industry market share of 8.4% in FY17
Top Shareholdings:
The list of the top shareholders of the company and the number of equity shares held by them is as below:
Objective of the issue:
– To achieve the benefits of listing the equity shares of the company on the stock exchanges
– Carry out the sale of 8,62,47,187 equity shares by the selling shareholders. The company will not receive any proceeds from the offer for sale.
Anchor Investors: Will be available one day before the IPO opens.
Financials:
Valuation as compared to its peers:
At the price band of Rs651-661 the asking valuations for the issue are ~46-47x its FY17 EPS of Rs 14.1/- & ~8x P/BV for FY17.
At this band, the company is valued at around Rs30,000 crore, a jump of 48% in just six months. In May, the general insurer’s Canadian shareholder Fairfax Financial Holdings Ltd diluted its stake that had valued ICICI Lombard at a little over Rs20,000 crore.
ICICI Lombard General Insurance Company would be the first non-life insurance company to go public. Several insurance companies, including state-owned ones, are queuing up to launch IPOs, which include companies like SBI Life Insurance Co. Ltd, HDFC Standard Life Insurance Co. Ltd, General Insurance Corp. of India and New India Assurance Co. Ltd
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Should you invest: The valuation looks quite high, investors may consider to invest with a long term view as the company has leadership position in its sector. However, there may not be huge listing gains.