GIC Re IPO likely by December

THE country’s only reinsurance firm General Insurance Corporation is likely come out with an initial public offering by December, to become the first public sector insurance firm to list on the stock exchanges, sources said, reports Prasanta Sahu in New Delhi. The government’s stake in the company is likely to be diluted by up to 10%, the sources said. The GIC IPO is likely to be followed up by the listing of state-owned New India Assurance.

New Delhi, June 13: The country’s only reinsurance firm, General Insurance Corporation (GIC Re), is likely to come out with an initial public offer (IPO) by December to become the first public sector insurance firm to list on the stock exchanges, sources told FE.

The government ownership in the company is likely to be diluted by up to 10% in the IPO, sources said. The GIC IPO is likely to be followed by the listing of state-owned New India Assurance Company, the largest domestic non-life insurance fir m.

In the Budget this year, the gover nment had announced general insurance companies would be listed to ensure higher levels of transparency and accountability. The listings of three other general insurers — National Insurance Company, Oriental Insurance Company and United India Insurance Company — are likely in the second phase.

“The processes have begun for GIC listing, which should happen by December,” an official with knowledge on the matter told FE.

GIC’s robust performance in recent years has made it the first candidate for listing among state-owned general insurers.

GIC Re’s profit after tax rose nearly 20% to `2,693 crore in FY15. Its business mix has nearly half of the premium generated from overseas. The net worth of the company stood at `41,148 crore, including fair value change account at March-end 2015.

Being the sole national reinsurer, it had a strong presence in India’s insurance market while continuing to expand its business overseas, including Asia, Europe and Africa. The listing would help the company to expand to newer markets such as US and China.

GIC has been giving reinsurance support to four public sector and other private general insurance companies since 2000. It also facilitates managing marine hull pool, terrorism pool, Indian motor third party insurance pool and of late, the nuclear liability pool on behalf of the Indian insurance industry.

New India IPO is expected in early 2017 to help the company fund its business growth plans. It has posted a profit after tax of `829 crore in FY16, down 42% from the year-ago period, partly on account of loss due to the Chennai floods. However, it still commanded nearly 16%, the highest market share in domestic general insurance premium income underwritten in FY16.

The GIC IPO is likely to be followed by the listing of state-owned New India Assurance Company, the largest domestic non-life insurance firm