IPO Note - General Insurance Corporation of India (GIC Re): Angel Broking

Views of Mr. Jaikishan J Parmar (Research Analyst, Angel Broking):

"General Insurance Corporation of India (GIC Re) is the largest reinsurer company in terms of gross premium (GP) accepted, having a market share of 60% in India. GIC Re provides reinsurance across key business lines including fire (property), marine, motor, engineering, agriculture, aviation, health, liability & credit, etc.

Outlook & Valuation: At the upper end of the IPO price band it is offered at 25x its FY2017 EPS and 4x its FY2017 book value (Pre-IPO). The agriculture GP has grown aggressively over the last 3 years largely due to the initiatives taken by the Government and it contributed 29% of GP in FY2017 (4% in FY2014). However, the financials of the company may get affected adversely if India witnesses bad monsoon or successive poor monsoon seasons, drought, flooding or other catastrophic events impacting the Indian agriculture industry. Nonetheless, positives such as leadership position, well-managed investment book, robust balance sheet and reasonable valuations provide comfort, hence, we recommend SUBSCRIBE on this Issue."

Source : Equity Bulls

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