New India Assurance Co. Ltd (NIA) and General Insurance Corp. of India Ltd (GIC) have now hired investment banks to manage their initial public offerings (IPOs).
The person, who is aware of the development, told Mint that “NIA had held investment bankers’ presentation on Saturday afternoon at its headquarters in Mumbai. They have appointed Axis Capital, Kotak Mahindra Capital, Yes Bank, IDFC Capital and Nomura to manage the initial public offering (IPO),”
The NIA IPO will include the sale of the government’s stake and new shares, said the second of the people cited above. “A part of the proceeds from the divestment will go to the government and another part will go to the company’s books. The firm is planning to divest a total of around 12-15%. The total value of the stake sale could be Rs7,000-8,000 crore,” this person said.
“The industry is growing at a fast rate of around 30%. If a part of the IPO proceeds goes to the company, it will only help to support the fast growth by capital contribution without diluting the solvency margin,” he added.
According to a report in the Mint, the GIC also selected Citibank, Axis Capital, Kotak Mahindra Capital Co Ltd, Deutsche Bank and HSBC were hired by GIC.
“The GIC IPO is expected to be at least Rs7,000 crore in size. The government is divesting 10% stake in GIC, which means the company will be valued at least Rs70,000 crore,” said a source to Mint, also requesting anonymity.
“Today, no general insurance company is listed. The idea is to get listed and set a benchmark for the industry,” said G. Srinivasan, chairman and managing director of NIA. The listing will take another five to six months, he said to the Mint.
The other firms which are owned by state for IPOs are defence ministry enterprises—Bharat Dynamics Ltd, Garden Reach Shipbuilders and Engineers Ltd and Mazagon Dock Shipbuilders Ltd—MSTC Ltd and Mishra Dhatu Nigam Ltd, controlled by the steel ministry, and North Eastern Electric Power Corp. Ltd, which is under the power ministry.
