About the Company:
ICICI Lombard General Insurance is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017, a position they have maintained since fiscal 2004 after being one of the first few private-sector companies to commence operations in the sector in fiscal 2001.
They offer customers a comprehensive and well-diversified range of products, including motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels.
Company was founded as a joint venture between ICICI Bank Limited, India’s largest private-sector bank in terms of consolidated total assets with an asset base of ₹ 9.9 trillion at March 31, 2017, and Fairfax Financial Holdings Limited, a Canadian based holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management with US$43.38 billion of total assets at December 31, 2016.
In fiscal 2017,they have issued 17.7 million policies and their gross direct premium income was ₹ 107.25 billion, translating into a market share, on a gross direct premium income basis, of 8.4% among all non-life insurers in India and 18.0% among private-sector non-life insurers in India.
Company’s key distribution channels are direct sales, individual agents, bank partners, other corporate agents, brokers, and digital, through which we service our individual, corporate and government customers.Company’s strong distribution network enables them to reach customers in 618 out of 716 districts across India.
As of March 31, 2017,they had ₹ 150.79 billion in total investment assets.They have the largest total investment assets among the private-sector non-life insurers in India, with an investment leverage, net of borrowings of 3.92x as at March 31, 2017.
Company’s annualised total portfolio return (including unrealised gains) for fiscal 2017 was 13.0%. Listed equities made up 16.1% of the total investment assets, by carrying value, as of March 31, 2017. Since fiscal 2004,Their listed equity portfolio has returned an annualised total return of 30.8%, as compared to an annualised return of 17.5% on the benchmark S&P NIFTY index.
Products offered by the Company:
Motor Insurance:
Motor insurance in India is broadly divided into two categories: own damage and third-party. Own damage motor insurance protects a vehicle owner from damage or theft to his/her own motor vehicle, and is optional. On the other hand, third-party motor insurance, which protects all third parties from damages suffered due to an accident involving a motor vehicle, must be purchased by every motor vehicle owner in India.
Motor insurance accounted for 51.2%, 51.3% and 42.3% of our GDPI in fiscal 2015, 2016 and 2017, respectively, as compared to 44.4%, 43.9% and 39.4%, respectively, of the non-life insurance industry in India in the same periods.Their GDPI from motor insurance increased from ₹ 34.16 billion in fiscal 2015 to ₹ 45.42 billion in fiscal
2017, representing a CAGR of 15.3%.
Health and Personal Accident Insurance:
Health insurance accounted for 19.7%, 17.1% and 15.5% of their GDPI in fiscal 2015, 2016 and 2017, respectively, as compared to 24.6%, 26.6% and 25.3%, respectively, of the non-life insurance industry in India in the same periods.Their GDPI from health insurance increased from ₹ 13.18 billion in fiscal 2015 to ₹ 16.68 billion in fiscal 2017, representing a CAGR of 12.5%.
Company’s health insurance portfolio consists of corporate health, mass health and retail health.
Corporate health:
The corporate health segment consists of policies purchased by corporates, including SMEs, as employee benefits. The GDPI in this segment has increased from ₹ 4.70 billion in fiscal 2015 to ₹ 5.43 billion in fiscal 2017, representing a CAGR of 7.5%.
Crop/Weather Insurance:
Crop/weather insurance is purchased by farmers to protect themselves against reduction in their crop yield or loss of their crops due to natural phenomena like inadequate or excessive rainfall, hailstorm, landslides and variation in temperature and humidity.
Fire Insurance:
Fire insurance covers damage or loss to property because of fire, riot, strike, earthquake, storm, flood, and certain other natural catastrophes.
Marine Insurance:
Marine insurance insures goods that are being transported, by land or by sea, and the insurance of ships, boats and offshore structures.They provide marine insurance for both large and mid-sized corporate clients for normal, bulk and project cargo.
Engineering Insurance:
Engineering insurance refers to the insurance that provides coverage for risks faced by an ongoing construction project, installation project, and machines and equipment used in such project.
Other Insurance:
Travel insurance – covering, among others, medical expenses, trip cancellation, lost luggage, flight accident and other losses while travelling.
Aviation insurance – insuring the policy holder for, among others, hull losses and for passenger injuries caused by aircraft accidents.
Credit insurance – insuring the policy holder against bad debts.
Home insurance – insuring the policy holder against damage to a home caused by perils such as fire, storm, typhoon, lightning, theft, riot, strike and malicious
damage.
Liability insurance – insuring the policy holder against the risk of liability imposed by lawsuits or other similar claims from third parties related to the coverage
reasons.
Burglary insurance, money insurance, fidelity insurance, baggage insurance, event insurance and art insurance.
Also Watch the Video Review:
Management Team:
- Mrs.Chanda Deepak Kochhar (Designation: Non-Executive Chairperson and Nominee Director)
- Mr.Ved Prakash Chaturvedi (Designation: Independent Director)
- Mr.Uday Madhav Chitale (Designation: Independent Director)
TOP 10 Shareholders:
| Sr.No. | Shareholder Name | Number of Equity Shares held | Percentage of Equity Share Capital % |
|---|---|---|---|
| 1. | ICICI Bank | 285,605,284 | 62.95 |
| 2. | FAL (Fairfax) | 99,464,479 | 21.92 |
| 3. | Red Bloom Investment Ltd | 40,889,791 | 9.01 |
| 4. | Tamarind Capital Pte Ltd | 7,211,596 | 1.59 |
| 5. | IIFL Special Opportunities Fund | 4,076,135 | 0.90 |
| 6. | IIFL Special Opportunities Fund – Series 2 | 2,717,424 | 0.60 |
| 7. | IVF Trustee Company Private Limited | 1,402,200 | 0.31 |
| 8. | IIFL Special Opportunities Fund – Series 3 | 970,509 | 0.21 |
| 9. | Sandeep Bakhshi | 941,250 | 0.21 |
| 10. | Alok Kumar Agarwal | 4,55,000 | 0.10 |
| Total | 44,37,33,668 | 97.80% |
Company’s Future Growth Strategies:
- Leverage and enhance market leadership.
- Enhance product offerings and distribution channels.
- Capture new market opportunities.
- Further improve operating and financial performance.
Positives of the Company:
- Consistent market leadership and demonstrated growth.
- Diverse product line with multi-channel distribution network.
- Superior operating and Financial performance.
- Strong Promoter backing.(ICICI Bank)
- They are growing faster than the industry.
- Tied-up with Uber to provide accidental cover to 4.5 Lakh of its drivers.
Negatives of the Company:
- Seeking High Valuations.
- 4 months back Fairfax, offloaded part stake of 12.18 percent to a various of investors, including Warburg Pincus for around Rs 2480 crore. (Valuation of Rs.20,361 cr)($3.13 billion) & now they are asking for valuation of Rs.35,692 crore ($5.49 billion).
Financials of the Company:
| (in Crores) | FY 13 | FY 14 | FY 15 | FY 16 | FY 17 |
|---|---|---|---|---|---|
| Revenue | 4620.58 | 5174.17 | 5238.46 | 6412.79 | 7617.52 |
| Net Profit | 380.10 | 551.48 | 585.82 | 504.07 | 622.1 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 15th September 2017 |
| Isue Closes on:. | 19th September 2017 |
| Issue Price | Rs.651 – 661 |
| Face Value | Rs.10 |
| Minimum Lot | 22 |
| Minimum Investment | Rs.14,542 |
| Issue Constitutes | 19% |
| Issue Size | Rs.5700 cr |
| Market Cap | Rs.30,000 cr |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 8,62,47,187 |
| Equity Shares Prior | 45,37,35,404 |
| Equity Shares after the issue | 45,37,35,404 |
Important Dates:
| Finalization of Basis of Alottment | on or Before 22nd September 2017 |
| Initiation of Refunds | on or Before 25th September 2017 |
| Credit of Equity Shares: | on or Before 26th September 2017 |
| Listing Date: | on or Before 27th September 2017 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 05:55 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 1,63,86,966 | 0.62 | 2.373 | 8.18 |
| NII | 1,22,90,225 | 0.035 | 0.096 | 0.83 |
| Retail | 2,86,77,190 | 0.198 | 0.618 | 1.18 |
| Shareholders | 43,12,359 | 0.269 | 0.582 | 0.984 |
| TOTAL | 6,16,66,740 | 0.269 | 0.976 | 2.96 |
IPO Valuation parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 13.88 | 47.62 | 17.82 | 82.57 |
Markets Guruji Opinion:
| IPO View | Apply For: | Expected listing Gain: |
|---|---|---|
| Subscribe | Long Term | 10% |
