Here are all the Research Analysts Views on the " New India Assurance" IPO which will be mostly subscribed by the LIC of India to give money to the Government.
Adroit Research told us,
Plus, a solvency ratio of 2.2x places the company in a comfortable position to pursue growth going forward. At the upper price band of Rs. 800 per share, the company is valued at Rs. 659.2 billion which translates into a P/E ratio of 78x FY17 EPS and 2.8x FY17 GWP. But on the basis of these trailing multiples, the issue may look expensive; however, taking into account future growth potential of general insurance and given the company’s market leadership position, reputation and strong brand name, we recommend neutral on this company.
SPA Securities Analyst Siddesh Mhatre has arrived at the following view,
The company's premium has grown at a CAGR of ~17% over FY14-17. We believe low penetration, increasing awareness for insurance, rising income levels, multi channel distribution network, focus on product innovation and improved underwriting profitability will help the insurer to improve its Roe going ahead (in the range of 7-13% over the last 3 years vs. ICICI Lombard Roe in excess of 16% over last 5 years). At the upper price band of INR 800 per share, the issue is valued at 3.2x FY17 P/BV (incl. fair value changes) and 80x FY17 P/E. We recommend SUBSCRIBE to the issue as a good long term investment.
GEPL Capital has the following Recommendation
The New India Assurance Co. Ltd (NIA) stands to gain from operating leverage. At a P/BV of 2.4xs of FY17 book value. We believe that NIA demands a discount to its domestic peers. We assign a Subscribe rating to the IPO.
Akash Jain of Ajcon Global said
At the upper end of the price band of Rs. 800, the IPO is valued at a P/E of 79x and P/BV 5x (excluding fair value change account) on post IPO basis as against P/E of 45x and P/BV of 8x for ICICI Lombard which is very expensive considering single digit ROE as compared to ICICI Lombard ROE of 18.4 percent. In terms of operating metrics and investment yield too, ICICI Lombard is better placed than The New India Assurance. We recommend investors to stay away from this IPO but consider it post listing as it may be available at a discount.
KR Choksey Research Analyst - Raghav Garg and amit Singh told us
At the upper price band of Rs. 800 per share, the company is valued at Rs. 659.2 bn which translates into a P/E ratio of 78x FY17 EPS and 2.8x FY17 GWP. Based on these trailing multiples, the issue may look expensive; however, taking into account future growth
potential of general insurance and given the company’s market leadership position, reputation and strong brand name, we advise
to SUBSCRIBE FOR THE LONG-TERM.
Atish Matlawala of SSJ Finance said,
NIA has reported a CAGR of 16.7% on premiums earned, however, its net profit declined by CAGR of 1.8% over FY2013-2017. On its upper band of price of Rs 800, the issue is priced at P/BV ratio of 5.0x of its Q1FY2018 Book value of Rs 160. We believe that the IPO is overpriced leaving little appreciation for investor. Hence, we recommend to Avoid the IPO.
