New India Assurance looking for merchant bankers to manage IPO
State-run insurer New India Assurance Company is looking for merchant bankers to manage its disinvestment through an initial public offering (IPO).
Within a week of PSU reinsurer General Insurance Corporation (GIC Re) floating an RFP for merchant bankers, the New India Assurance (NIA) has asked bankers to submit their bids by April 19.
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"The size of IPO offer and structure shall be decided by the company in consultation with the selected BRLMs, legal advisers subject to regulatory requirements," New India Assurance said in a Request for Proposal for merchant bankers. The company would appoint up to seven merchant bankers for managing the share sale. The authorised share capital of the company is Rs 300 crore and the paid-up share capital is Rs 200 crore as on March 31, 2016. The government currently holds 100 per cent stake in the company.
Besides underwriting the IPO, the merchant bankers would advise New India 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 company.
Headquartered in Mumbai, New India Assurance is the only Indian entity to have a trading desk at Lloyds of London. The general insurance company has issued 2.6 crore policies and processed 24 lakh claims in the year 2015-16.
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.
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.