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General Insurance Invites Merchant Bankers To Bid

General Insurance Corporation (GIC RE) Invites Merchant Bankers To Bid For Its Upcoming IPO:

General Insurance Corporation (GIC Re) is likely to be the first PSU insurer to tap the capital market as the Finance Ministry has started scouting for merchant bankers to manage its IPO.

Two months after the Union Cabinet gave a go ahead to the listing of five general insurance companies, the Department of Investment and Public Asset Management (DIPAM) has set the ball rolling for listing of GIC Re.

The government holds 100 per cent stake in GIC Re, which provides reinsurance support to 54 general and life insurance companies, both public and private, in the Indian market.

The authorised and paid-up share capital of the reinsurance company was Rs. 1,000 crore and Rs. 430 crore, respectively, as on March 31, 2016. “GIC Re will be going for an initial public offer (IPO) of equity shares with face value of Rs. 5 each to the public in the domestic market,” the DIPAM said while inviting merchant bankers to bid for managing the share sale.

The state-owned reinsurer would appoint up to eight merchant bankers for managing the IPO. Merchant bankers have to submit bids by April 18.

The share sale could hit the market only in the next fiscal.

In mid-January, the Cabinet had approved listing of general insurance companies — New India Assurance Company, United India Insurance, Oriental Insurance Company, National Insurance Company and General Insurance Corporation of India (GIC Re). It had approved dilution of up to 25 per cent equity stake in the five companies.

DIPAM in its request for proposal (RFP) said the size of the IPO and its structure shall be decided by the government or the company in consultation with selected bankers and legal advisors.

Besides underwriting the IPO, the merchant bankers would advise GIC Re and the government on the timing and the modalities of the IPO. They would also undertake due-diligence activities and prepare the draft prospectus, among other things.

The bankers would also organise both domestic and international road shows and ensure best return from the IPO to the government and the company.

The government has set a steep disinvestment target of Rs. 72,500 crore for the next fiscal, of which Rs. 11,000 crore is expected to come from listing of PSU general insurance companies.

DIPAM has come out with guidelines for mechanism and procedure for time-bound listing of CPSEs on stock exchanges under which the government has mandated launch of initial public offer (IPO) within five-and-a-half months of a nod from the ministry concerned.

Market Update:

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Now Avanue Supermarts (Dmart) IPO Allotment and Listing also completed. And people made an awesome 100% profit on listing.

Now CL Educate (CLEL) IPO bidding has been closes on March 22, 2017. Now CL Educate (CLEL) IPO Allotment and Listing will be in process. While Shankara Building Products Ltd IPO (SBPL IPO) bidding also closed on 24 March 2017. Now Shankara Building Products IPO Allotment and Listing will be in process.

Grey Market Premium (GMP) of CL Educate IPO (CLEL IPO) is still now active. While Grey Market Premium (GMP) of Shankara Building Products Ltd (SBPL) IPO is trading between Rs 133 – Rs 135 per equity share.

Next in the pipeline will be HUDCO IPO,  Central Depository Services Ltd IPO (CDSL IPO)  and Continental Warehousing Corporation Ltd IPO (Nhava Seva IPO).

Some SME IPO will also be active in market in coming week.

This year we can see some good IPO hitting market like NSE Ltd IPOHDFC Standard life insurance, SBI life insurance etc.

Keep watching this blog to keep yourself updated with all the news.

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