NIA shares fall 9.4% on market debut

MUMBAI: Shares of New India Assurance Co Ltd (NIA) closed 9.4% below issue price on the company’s first day on the bourses, after an initial share sale that barely scraped through.

After opening at ₹748.90 on the BSE, 6.39% below the issue price of ₹800, NIA shares fell further to close at ₹725.05, down 9.37%. During the day, NIA shares touched a high and a low of ₹749 and ₹717.75, respectively.

The Sensex shed 0.84% to close at 33,033.56 points.

The state-owned general insurer had priced its shares at ₹770-800 in its ₹9,600 crore initial public offer (IPO), which was subscribed 1.19 times.

Many analysts had recommended avoiding the IPO and questioned the steep valuation, given the relatively lower returns the insurer offers.

“Insurance sector—there has been an overdose of IPOs in the last 6-8 months,” said Anuradha Thakur, joint secretary, department of investment & public asset management (Dipam) in the ministry of finance.

Of the six insurance companies that were listed in 2017, three are trading below their issue price—including the two state-run companies General Insurance Corporation of India (GIC Re) and NIA.