GIC Re IPO Issue
This post on GIC Re IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on GIC Re 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 GIC Re IPO or not.

Related Posts: GIC Re IPO Review: NBFC Play
GIC Re IPO: Grey Market Premium etc.

13/10/17 Grey Market Premium Rs. -30 , kostak on Rs. 2 lac application , Rs. 3000/-
11/10/17 Grey Market Premium Rs. -20 , kostak on Rs. 2 lac application , Rs. 2700/-

Subscription: GIC Re IPO  ( x times)
 QIBNIIRetailEmpTotal
Day 32.250.220.630.941.38
Day21.680.020.160.420.9
Day 11.550.010.060.130.8


Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on GIC Re IPO

Angel Broking:At the upper end of the IPO price band it is offered at 25x its FY2017 EPS and 4x its FY2017 book value (Pre-IPO). The agriculture GP has grown aggressively over the last 3 years largely due to the initiatives taken by the Government and it contributed 29% of GP in FY2017 (4% in FY2014). However, the financials of the company may get affected adversely if India witnesses bad monsoon or successive poor monsoon seasons, drought, flooding or other catastrophic events impacting the Indian agriculture industry. Nonetheless, positives such as leadership position, well managed investment book, robust balance sheet and reasonable valuations provide comfort, hence, we recommend SUBSCRIBE on this Issue.”

Arihant Capital: “The issue has been offered in a price band of Rs 855-912 per equity share. At the upper price band of Rs 912 the stock is available at P/BV of 1.6(x) and P/E of 23(x) based on FY17 EPS. There are no listed reinsurance companies in India. Accordingly, it is not possible to provide an industry comparison in relation to the Corporation. Based on qualitative pointers, robust past growth and future potential, above mentioned strengths and management quality we have “4 star” rating for the issue.”

AUM Capital “ Company is aiming to be a leading global reinsurance and risk solution provider and thus planning strategies to fulfill that goal. The company aims to maintain its dominant role in the industry, expand business operations internationally and grow profitably through reduction in combined ratio and acquisition strategies. Being a leader and experienced in reinsurance business with strong financial track records and healthy balance sheet, we believe that the company has bright prospects in the future. Hence, we recommend to SUBSCRIBE the issue from a long term prospective.. “

Ashika Direct: “GIC has no listed peers to compare with. On the valuation front, at the higher price band of Rs. 912, the issue is priced at P/E of 25.5x FY17 post issue EPS. Thus, the issue appears to be attractively priced considering strong financial track record,healthy balance sheet and bright prospects of the overall general insurance sector in the future. Hence, we recommend our investors to “SUBSCRIBE” the issue from a medium to long term perspective.”

Capital Market: ” Score 53/100, he performance is better than global peers on a number of parameters, besides recording one of the fastest growths in the non-life gross premium income. The commission ratio as well as net expense ratio is one of the lowest in the global reinsurance industry. The yield on the investment book as well as the return on equity is strong. The combined ratio, though above 100%, has been consistently reduced. The post-issue book value (BV) was Rs 618.1 including fair value change account end June 2017. The scrip is offered at a P/BV multiple of 1.5 times at the upper price band of Rs 912 per share.

India Infoline: “Gross premium growth for GIC Re should remain sturdy in the coming years owing to: a) sustained brisk growth in Indian non-life insurance industry; b) expanding reinsurance market in India and c) tapping of new global markets including the largest ones. The potent combo of likely inroads into global market along with better pricing in domestic market should further improve the combined ratio in the medium term, save for any untoward loss. At the IPO price of Rs 912, GIC Re is reasonably valued at 3.6x P/BV on a post money basis. The valuation, inclusive of Fair Value Change Account (FVCA), drops to 1.5x P/BV. We recommend Subscribe.”

Prabhudas Lilladher: “At the upper band of Rs912, the company trades at 27.4x Mar‐17 EPS which we believe is fairly priced, but given the liquidity in the markets and company’s performance in the recent past, we recommend to Subscribe for long term gains.<//p>

Religare Sec
: “Being the sole reinsurer in India, the company doesn’t have domestic
peers. However, when compared to global peers, it has the lowest net expense ratio of 18.5% and highest net investment yield of 12.3% as of 2016-2017. At the upper end of the price band, GICRE is valued at ~3.9x Net Asset Value (NAV) of Rs 234.2 per share.”

SMC : “Rating 3/5 GIC is registered with IRDAI for carrying on reinsurance business pursuant to the registration certificate dated 2 April 2001. It also follows robust and comprehensive risk management framework. As a trusted brand in the Indian market with 44 years of experience, GIC believes that it is well placed to take advantage of this industry growth. Given the company’s strong growth and consistent dividend record, a long term investor may opt the issue..”

SP Tulsiyan website: “Company has sound fundamentals supported by healthy sector growth. Retail discount of 5% to issue price is not only an investor friendly move, but also keeps up with Govt’s motive to encourage formal avenues of financial savings in the nation. Based on reasonable pricing of the issue, GIC is a Good Investment Choice”

Way2Wealth: “At the price band of Rs. 855-912/- the issue commands a valuation of ~1.6x its FY17 book value of `500 bn. Given the higher growth prospects vs. peers globally we believe  the issue is attractively priced and advise investors with a long term investment horizon to SUBSCRIBE to the issue.”

2 thoughts on “GIC Re IPO: Brokerage Views & Run up to the IPO

  1. SUB: A REQUEST TO ISSUE SHARES OF REPUTED CONCERNS AT MINIMUM PRICES AT BSE/ NSE IN MAIN STREAM IPO.

    DEAR SIRS,

    MANY THANKS FOR YOUR SERVICES FOR THE BENEFIT OF THE SHAREHOLDERS.

    NOWADAYS MORE IPOS ARE COMING AND CERTAINLY IT IS A GOOD SIGN FOR INDIAN STOCK MARKET AS WELL AS INDIAN ECONOMY AS MANY COMPANIES ARE FOLLOWING LPG POLICY (PRIVATISATION, GLOBALISATION & LIBERALISATION). THERE IS NO DOUBT THAT SENSEX & NIFTY IS A YARDSTICK OF INDIAN ECONOMY.

    BUT THE PROBLEM LIES WITH THE PRICE BRAND OF THE IPOS. THE GREEDY PROMOTERS ARE GOING TO TAKE THE ADVANTAGES OF BOOMING IPO MARKET AND SO FIX UP A HIGH PRICE BRAND FOR MAKING HUGE PROFITS. SO THERE MUST BE SOME RULES AND REGULATIONS TO RESTRICT THE IPO PRICE AS MORE NEW INVESTORS ARE COMING INTO INDIAN STOCK MARKET ONLY THROUGH IPOS.

    SO SOME RULES AND REGULATIONS MUST BE INTRODUCED TO MAKE A CAP OVER THE IPO PRICE, AS INVESTMENT IN IPO IS SAFE THAN SECONDARY MARKET AND ONE OF THE BEST WAY OF INVESTMENT.

    ACCORDING TO ME, INVESTMENT IN AN IPO IS ONE OF THE BEST WAY TO ERADICATE INCOME INEQUALITY IN OUR SOCIETY AND ALSO IT SUPPORTS THE TRICKLE DOWN THEORY OF ECONOMICS.

    MOREOVER, AS MOST OF THE COMMON PEOPLE CAN’T FOLLOW THE SECONDARY MARKET PROPERLY DUE TO LACK OF ACCURATE KNOWLEDGE, EXPERIENCE, EXPERTISE AND TIME, THEY INCUR LOSSES. NOW IPOS GIVE THEM A CHANCE TO RECOVER SUCH LOSSES.

    LAST BUT NOT THE LEAST, NEW INVESTORS ARE COMING INTO THE EQUITY MARKET ONLY THROUGH IPOS AND CERTAINLY IT IS A VERY GOOD SIGN FOR AN EMERGING ECONOMY LIKE INDIA. NOW THE PROMOTERS OF THE COMPANIES SHOULD GIVE THEM AT LEAST SOME CHANCES TO GET SOME LISTING GAINS.

    ON BEHALF OF THE SMALL INVESTORS. I, WOULD, THEREFORE REQUEST THE FORUM MEMBERS AND ADMIN TO LOOK AFTER THE MATTER SERIOUSLY.

    I AM LOOKING FOR YOUR EARLY & POSITIVE ACTIONS.

    THANKS & REGARDS,
    K P CHAKRABARTI

    N.B. THE CENTRAL GOVT. HAS ALREADY TAKEN DECISIONS OF MAKING IPOS OF 2 LARGE PSUS- LIC & BSNL IN 2015. BUT AFTER THAT, NO ACTIONS HAVE BEEN TAKEN. SO PLEASE TAKE IMEDIATE STEPS REGARDING THIS MATTER.

    1. After abolition of CCI there is no way for Govt to exert control on IPO pricing and it is market driven. There is certainly tendency to overcharge and lot of IPOs coming many times is a sign of greed on part of promoters to cash in on a strong underlying market and many times signals a heated market ripe for correction. Agree with you that IPO is a good way for retail to have a pie of stock markets. The key is to keep good IPO’s from reputed promoters or promising sectors like Godrej agrovet, Mahanagar Gas, Quess corporation, Ujjivan, RBL, endurance for medium to long term and move out of weak ones. Will check if there is a way to get our vpoice heard. Right now one option may be lodge a request with SEBI to control the pricing and prescribe more strict norms from it as it is the sole agency responsible for healthy capital markets

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