IPOs

In this article, Parth Sarthy Kaushik discusses 5 biggest Indian IPOs of 2017 so far.

Initial Public Offering (IPO) is the process by which a private company goes public by sale of its stocks to general public. The IPO is an exciting time for a company and signifies that it has become successful enough to require much more capital to continue to grow. Following are the five biggest Indian IPOs of 2017 (so far).

General Insurance Corporation of India

General Insurance Corporation of India is the largest reinsurance company in India in terms of gross premiums. The company provides reinsurance across key business lines including fire, marine, motor, engineering, agriculture, liability, credit and finance. Through the IPO, the Government of India is selling 12.26 % stake in the company and the Corporation itself is selling 1.96 % stake.

This will be India’s third biggest public offer ever after Coal India’s Rs 15,200 crore and Reliance Power’s Rs 11,700 crore issues.

Issue Details

  • Objects of the Issue: (a) Fresh Issue will be utilized to increase the capital base to support the growth of their business and maintain current solvency levels; (b) The proceeds from OFS would help the government meet its fiscal deficit target of 3.2 % of GDP for the year ending in March.
  • Issue Type: Book Built
  • Opening Date: October 11, 2017
  • Closing Date: October 13, 2017
  • Provisional Listing Date: October 25, 2017
  • Issue Size: Rs. 11,372.64 Cr. (Fresh Issue- 1.7 cr. Units; OFS- 10.7cr. units)
  • Face Value: Rs. 5 per Equity Share
  • Price Band: Rs. 855 – Rs. 912 per Equity Share
  • Sector: Reinsurance
  • Ratings: Stable
  • Risk Factors: Highly-regulated industry, ability to accurately assess the risk associated with the reinsured businesses and substantial exposure to agriculture sector.
  • Listing At: BSE & NSE

SBI LIFE

SBI Life Insurance Company is India’s largest private life insurance firm in terms of new business premium (NBP), second only to Life Insurance Corporation of India (LIC). It was established in 2001 as a joint venture between State Bank of India (SBI), which is India’s largest state-owned banking and financial services company, and BNP Paribas Cardiff.

Issue Details

  • Objects of the Issue: Providing liquidity to the existing shareholders and enhancing the “SBI Life” brand name.
  • Issue Type: Book Built
  • Opening Date: September 20, 2017
  • Closing Date: September 22, 2017
  • Listing Date: October 3, 2017
  • Issue Size: Rs. 8400 Cr. (Fresh issue- 12 crore units)
  • Face Value: Rs. 10 per Equity Share
  • Issue Price: Rs. 700 per Equity Share
  • Oversubscribed: 3.6 times
  • Sector: Life Insurance
  • Ratings: Stable
  • Risk Factors: Change in Interest Rates, Highly Regulated Industry & Inability to Maintain Market Share
  • Listing At: BSE & NSE

ICICI Lombard General Insurance

ICICI Lombard General Insurance Company Limited is ICICI Bank Ltd. is the largest private non-life insurance firm in India, having 8.4% market share on gross direct premium income (GDPI) basis. It was incorporated in 2002 as a joint venture between India’s largest private-sector bank and Fairfax Financial Holdings Limited. The company offers a comprehensive and well-diversified range of products, including motor, health, crop/weather, fire, marine, engineering and liability insurance, through multiple distribution channels.

Issue Details

  • Objects of the Issue: Providing liquidity to the existing shareholders and enhancing the “ICICI Lombard” brand name.
  • Issue Type: Book Built
  • Opening Date: September 15, 2017
  • Closing Date: September 19, 2017
  • Listing Date: September 27, 2017
  • Issue Size: Rs. 5700 Cr. (OFS- 8.6 crore units)
  • Face Value: Rs. 10 per Equity Share
  • Issue Price: Rs. 661 per Equity Share
  • Oversubscribed: 3 times
  • Sector: General Insurance
  • Ratings: Stable
  • Risk Factors: Concentration Risk, Regulatory Changes & Substantial Exposure to Crop/Weather Insurance.
  • Listing At: BSE & NSE

IRB InvIT Fund

IRB InvIT Fund is an infrastructure investment trust sponsored by IRP Infrastructure Developers Limited, one of the largest infrastructure development and construction companies in India. It owns, operates and maintains a portfolio of toll-road assets in India.

IRB InvIT has the distinction of being the first IPO in the InvIT space.

Issue Details

  • Objects of the Issue: Investment in the Project SPVs by way of an issue of debt.
  • Issue Type: Book Built
  • Opening Date: May 3, 2017
  • Closing Date: May 5, 2017
  • Listing Date: May 18, 2017
  • Issue Size: Rs. 5291 Cr. (Fresh issue- Rs. 4,300 crore; OFS- 34.6 crore units)
  • Face Value/Issue Price: Rs. 102 per Equity Share
  • Oversubscribed: 8.6 times
  • Tenure: 16 years
  • Sector: Toll Road Construction
  • Ratings: AAA/Stable
  • Risk Factors: Inflation, Traffic Volume & Government Policies
  • Listing At: BSE & NSE

IndiGrid InvIT Fund

IndiGrid InvIT Fund is an infrastructure investment trust sponsored by Sterlite Power Grid Ventures Limited, one of the leading independent power transmission companies operating in the private sector. It was established in 2016 and owns inter-state power transmission assets in India.

IndiGrid InvIT is first ever IPO in the Power Sector InvIT space.

Issue Details

  • Objects of the Issue: Repayment of external debt as well as unsecured loans from Sterlite Power Grid Ventures Ltd. to Bhopal Dhule Transmission Company Ltd. and Jabalpur Transmission Company Limited.
  • Issue Type: Book Built
  • Opening Date: May 17, 2017
  • Closing Date: May 19, 2017
  • Listing Date: June 6, 2017
  • Issue Size: Rs. 2250 Cr. (Fresh Issue)
  • Face Value/Issue Price: Rs. 100 per Equity Share
  • Oversubscribed: 1.3 times
  • Tenure: 35 years
  • Sector: Power Transmission
  • Ratings: AAA/Stable
  • Risk Factors: Load Availability & Market Trends
  • Listing At: BSE & NSE

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