State-owned reinsurer General Insurance Corp of India yesterday filed for an initial public offering which bankers have said could raise more than US$1 billion, reported Reuters.
The government will be selling about 107.5 million shares in GIC Re's IPO, while the insurer will sell 17.2 million new shares, comprising a total 124.7 million, or 14.22% of the company's post-issue share capital, according to the filing.
GIC Re is the largest reinsurance company in India in terms of gross premiums accepted in the fiscal year ended 31 March 2017. The company accounted for close to 60% of the premiums ceded by Indian insurers to reinsurers during FY2017, according to CRISIL Research.
In its draft red herring prospectus, the reinsurer says that gross premiums on a restated consolidated basis in FY2017, FY2016 and FY2015 were INR337,407.91 million (US$5,286 million), INR185,342.45 million and INR152,701.56 million, respectively, and grew at a CAGR of 48.65% from FY2015 to FY2017. In the same fiscal years, profit after tax on a restated consolidated basis was INR31,406.23 million, INR28,234.15 million and INR28,909.75 million, respectively, and grew at a CAGR of 4.23% from FY2015 to FY2017.
GIC Re is also an international reinsurer that underwrote business from 162 countries as at 31 March 2017. According to CRISIL Research, it ranked as the 12th largest global reinsurer in 2016 and the 3rd largest Asian reinsurer in 2015, in terms of gross premiums accepted.
GIC Re's filing comes amid a surge in insurance IPOs including those of SBI Life Insurance, a unit of State Bank of India. The IPO application by GIC Re would be the first in the state-owned insurance sector. The government plans to list five nonlife insurers, including GIC Re, in which it holds 100% stakes. In his Budget speech last February, Finance Minister Arun Jaitley announced the government’s plan to list the state-owned insurers.
Currently, ICICI Prudential Life is the only listed insurer in India.