This post tries to bring together consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Grey Market Premium, Subscription etc on ICICI Lombard IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to ICICI Lombard IPO or not.
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ICICI Lombard IPO: Grey Market Premium etc.
18/9/17 Grey Market Premium Rs. 10-15/-
14/9/17 Grey Market Premium Rs. 15-20/-
13/9/17 Grey Market Premium Rs. 25/- ,
12/6/17 Grey Market Premium Rs. 40/-
10/6/17 Grey Market Premium Rs. 55/-
| Subscription: ICICI Lombard General Insurance Co. Ltd. IPO ( x times) | |||||
| QIB | NII | Retail | ICICI Share holders | Total | |
| Day 3 | 8.17 | .83 | 1.23 | .99 | 2.98 |
| Day 2 | 2.37 | 0.10 | 0.62 | 0.58 | 0.98 |
| Day 1 | 0.62 | 0.04 | 0.18 | 0.21 | 0.27 |
Complete Anchor Investors List
ICICI Lombard has finalized allocation of 24,580.447 Equity Shares in aggregate, to 57 Anchor Investors at Rs. 661 per Equity Share . Prominent Anchor Investors include : The Nomura Trust And Banking Co. Ltd, Unisuper Limited , Blackrock Emerging Frontiers Master Fijnd, Blackrock India Equities (Mauritius) Limited, Blackrock Asia Special Situations Fund, Kuwait Investment Authority Fund , ABN Amro Multi-Manager Funds. DHFL Pramerica Life, HDFC Life, BNP Arbitrage Fund, Goldman Sachs etc. etc. Click Here For Complete Anchor Investors List
Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on ICICI Lombard IPO .
Angel Broking: “The Indian Non-Life Insurance Industry has been one of the fastest growing markets across emerging markets with a 14.5% CAGR over CY2011-16. Despite the high growth the premium density as % of GDP is still at 0.77% which leaves scope for much scalability. At the upper price band of `661 the issue is offered at 8x its FY2017 BV. While on the reported numbers it might appear to be fairly valued, we believe with strong potential to deliver high double digit growth for next multiple years, the issue looks decently priced, and hence we have a SUBSCRIBE rating on the issue.”
Capital Market: ” Score 50/100 ; The company has a strong capital position, with a solvency ratio of 213% end June 2017, compared to the IRDAI-prescribed control level of 150%. India continues to be an underpenetrated market with a non-life insurance penetration of only 0.77% in 2016 as compared a global average of 2.81% in 2016. The untapped opportunity in general insurance provides ample scope for the company to grow its business.”
Centrum Broking: “The brokerage said ICICI Lombard’s valuation is high considering the RoE of 17.2 per cent for FY ended March 2017, loss ratio of 80.6 per cent and the combined ratio of 104 per cent is lower than the average of private peers. However, the issue may be a hit because it is the first general insurer to list, it said. Moreover, the nonlife insurance segment is underpenetrated in India and the company’s financials are strong”
Choice International: “we assign a “Subscribe with Caution” rating for the issue. We feel that that the investors can enter in this script at a lower price post listing and can hold it for a long period for better returns.”
Dalal Street Investment Journal DSIJ: “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. The market of insurance industry is large and is expected to grow at a fast pace. All the players in this industry would have opportunities to grow further. The company’s financial performance has been strong and being the first player to go public, it can have an advantage over others. The strong distribution channel enables the company to expand its customer base. Considering these factors, investors can subscribe to the IPO to reap long-term benefits.”
GEPL Capital: ” ICICI Lombard General Insurance Company (ILGIC) stands to gain from operating leverage and also rise in the business. At a P/BV of 3.2x we believe that ILGIC at discount to its domestic. We assign a Subscribe rating to the IPO.”
Hem Securities: “Co is bringing the issue at price band of Rs 651-661/share at p/b
multiple of 7.65 . Co’s market leadership with diverse product line , multi-channel distribution network & strong investment returns on a diversified portfolio makes it suitable candidate for investment.Hence we recommend “Subscribe” on issue”
KR Choksey: “At the upper price band of Rs. 661 per share, the company is valued at Rs. 300 bn which translates into a P/E ratio of 48x FY17 earnings and 2.7x FY17 GWP. Based on these trailing multiples, the issue is priced expensive as against some of the multiples at which deals have taken place recently. However, taking into account future growth potential of this business and the management’s focus on improving profitability of its underwriting operations while still maintaining a conservative reserving philosophy, we are positive on ICICI Lombard General Insurance. Hence, we advise to SUBSCRIBE FOR THE LONG-TERM.”
Motilal Oswal: “The brokerage said it is positive on ICICI Lombard for the long term as the non-life insurance sector offers strong growth opportunities due the lower penetration of insurance in India. The valuation is higher than listed non-banking financial companies and private banks, which are delivering high growth, but the multiple is justified ed given that return on equity has been consistently higher than 15 per cent in the last fi ve years, sector’s potential is strong, solvency margins are strong and the company has a leadership position in the sector.
Reliance Sec: “ICICI Lombard has delivered a strong growth in GDPI and has been successfully maintaining its leadership position amongst the private sector non-life insurers through various cycles of industry evolution since FY04. Besides, a healthy RoE in excess of 17%, its GDPI witnessed 26.7% CAGR through FY15-17 vs. 22.8% for Indian non-life insurance industry. Looking ahead, we expect ICICI Lombard to deliver strong performance on the back of lower general insurance penetration in India. At higher price band of Rs661, the Issue is priced at 35x 1QFY18 annualised earnings, which provides a healthy investment opportunity for the long-term investors. Thus, we recommend SUBSCRIBE to the Issue.”
SMC: “Rating 3/5. Considering the valuation at upper price band of Rs.661 , EPS and P/E of FY2017 are Rs. 14.14 and 46.75 multiple respectively and at a lower price band of Rs. 651, P/E multiple is 46.04; at upper price band of Rs.661 , book value and P/B of FY2017 are Rs.82.09 and 8.05 multiple respectively and at a lower price band of Rs. 651, P/B multiple is 7.93. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.”
SP Tulsiyan website: “Although valuations are steep, company’s strong leadership position, consistent track record and sector growth trajectory make the issue a subscribe, with potential to deliver 20% annual returns, over the long term. “
Way2wealth: “ICICI Lombard is the largest private-sector non-life insurer in India, a position the company has maintained since FY04 after being one of the first few private-sector companies to commence operations in the sector 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. ICICI Lombard has set a new standard by servicing 17.7 million policies in FY17, an increase of 12% and in terms of claim settlement response time, the company anchored set standards, settling 99.4% health claims and 92.2% motor claims (own damage) within 30 days. At the price band of `651-661 the asking valuations for the issue are ~46-47x its FY17 EPS of `14.1/- & ~8x P/BV for FY17. As a macro space we believe insurance sector can witness high growth as awareness of risk cover as well as shift of savings to financial assets accelerates over the next decade. Being a leader in the space & having superior operating metrics we believe the company is well poised to take up the opportunity of increase in penetration over the next few years. We advice investors with a long-term investment horizon to SUBSCRIBE to the issue.”
LiveMint: ICICI Lombard IPO offers slice of nascent market at hefty premium