ICICI Lombard IPO

ICICI Lombard Logo

Business description from prospectus – ICICI Lombard was the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017, a position it has maintained since fiscal 2004 after being one of the first few private-sector companies to commence operations in the sector in fiscal 2001. It offers 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. The 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 INR9.9 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 USD43.38 billion of total assets at December 31, 2016.

In fiscal 2017, ICICI Lombard issued 17.7 million policies and its gross direct premium income was INR107.25 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. Its key distribution channels are direct sales, individual agents, bank partners, other corporate agents, brokers, and digital, through which it services individual, corporate and government customers. Its distribution network enables us to reach customers in 618 out of 716 districts across India.

Promoter of ICICI Lombard General Insurance Company – ICICI Bank Limited 

ICICI Lombard IPO details
Subscription Dates 15 – 19 September 2017
Price Band INR651 – 661 per share
Fresh issue Nil
Offer For Sale 86,247,187 shares (INR5,614.7 – 5,700.9 crore)
Total IPO size 86,247,187 shares (INR5,614.7 – 5,700.9 crore)
Minimum bid (lot size) 22 shares
Face Value  INR10 per share
Retail Allocation 35%
Listing On NSE, BSE

ICICI Lombard’s financial performance (in INR crore)
FY2013 FY2014 FY2015 FY2016 FY2017
Total revenue 4,487.4 5,028.4 5,044.8 5,804.2 7,180.5
Operating income 302.6 412.8 558.4 482.0 667.0
Profit after tax 380.1 551.5 585.8 504.1 622.1

ICICI Lombard General Insurance Company Limited
15th Floor, Tower B, Peninsula Business Park,
Lower Parel, Mumbai 400 013

Phone: +91 22 6196 1100
Fax: +91 22 6196 1323
Email: [email protected]
Website: www.icicilombard.com

Karvy Computershare Private Limited
Karvy Selenium Tower B, Plot 31-32,
Gachibowli, Nanakramguda,
Hyderabad – 500 032, Telangana

Phone: +91 40 6716 2222 
Fax: +91 40 2343 1551 
Email: [email protected]
Website: www.karvycomputershare.com

Earnings Per Share (EPS): INR13.81

Price/Earnings (P/E) ratio: 47.14 – 47.86

Return on Net Worth (RONW): 17.82%

Net Asset Value (NAV): INR82.57 per share

ICICI Lombard IPO Subscription Details

Category Shares offered Subscription (no. of times, at 5 PM) 
Day 1 Day 2 Day 3
QIB 16,386,966 0.62 2.36 8.17
NII 12,290,225 0.03 0.09 0.82
Retail 28,677,190 0.17 0.61 1.17
ICICI Bank shareholders 4,312,359 0.21 0.58 0.98
Total 61,666,740 0.27 0.97 2.95

ICICI Lombard IPO allotment status is now available on Karvy Computershare’s website. Click on this link to get allotment status. You can also check allotment status using application number on this link.

IPO Opening Date: 15 September 2017

IPO Closing Date: 19 September 2017

Finalisation of Basis of Allotment: 22 September 2017

Initiation of refunds: 25 September 2017

Transfer of shares to demat accounts: 26 September 2017

Listing Date: 27 September 2017

Listing Price on NSE: INR651.1 per share (down 1.5% from IPO price)

Closing Price on NSE: INR681.2 per share (up 3.05% from IPO price)

50 COMMENTS

  1. Seriously!?! Is this an IPO offering or a JKL offering? {Janata ko looto!}… Pricing each share at 661 Rupees esp. one that earns a meager 13.81 EPS, the P/E becomes 47+… Isn’t that way overpriced? Given that its peer ICICI Prudential is struggling to hold the mid 400’s level with a P/E of 37, I am not sure this is such a good investment… Maybe ICICI regretted pricing the prudential offering last year at just Rs. 271 🙂 & so is trying to make amends by over pricing this one! Thoughts/Opinions/ Expert advise from any of the financial gurus/CA’s/Stock experts pls?

  2. These IPOs of companies in tough competitive environment, slow revenue/ profit growth, if priced above 20 p/e, it is better to avoid. Your money will be locked for years ( may be 5 years) till you see any profit. That also will be lower than bank FD. Secondary market has many attractive options available. Some at P/E of even 5. Well put ” Loot Lo Janta Ko”.

    • Any suggestions on good stocks Mr. Kumar? I know Vedanta and Hindustan Zinc are superb and I bought some after reading at a forum…. No regrets thus far! Any other suggestions please?

        • Thanks a ton Mr. Kumar… These are truly brilliant stocks! Infact DHFL is also giving FD’s and the best part is its annual interest of 8% is much better than bank FD’s, I just checked…

          I came across this money control link based on which it appears w.r.t peer comparison Dixon but not be all that expensive if invested in before 5 PM today –> http://www.moneycontrol.com/news/business/ipo-business/dixon-ipo-on-for-the-long-term-investors-2378815.html

          Thanks again & Good luck… May your investments flourish and do very well

        • Mr Kumar, while researching I uncovered that DHFL is massively in debt Sir! The company’s Market-Cap is close to 2400 Crore but its debt is upwards of 70,000 crores! No wonder despite giving the kind of earnings, D-street is wary of it. While researching I came across a company called “Star Paper”. Nearly zero debt, been an exceptional stock in the last 5 years and seems to have taken a pause before the next rally. It is also at nearly 5 P/E that is half of its industry peers… Pls review, research it and pass on your thoughts please.

  3. Clearly overpriced! AVOID at all cost. Just the way ICICI Prudential struggled below IPO price for long, it will be the same story with Lombard. IPO market going to dogs!!!

    • How different will it be to price it so high, Mr. Rajneesh? At the end of the day the way I look at it is insurance is pretty much always an option, one need NOT take it unless the Govt. forces it on you say when you buy a vehicle, which is the only situation where I feel insurance makes sense. So how would such a high P/E be justified Sir? I am not a finance guy so if any one of finance gurus/Stock experts can explain it better to me, I will look at it.

  5. SEBI should monitor IPO price. There is no clear guideline for IPO pricing. Now days IPOS have gone to dogs. Over priced IPO stay away and buy from secondry for long term investment.

    • Do not buy your shares now . First decide your investment goals such as long term or short term. I suggest long term. Learn fundamental analysis. Find fundamentally reasonable industry, then company. Wait for the market to fall, say, when North Korea fires another missile. This day when market has fallen in general and your stock has also thus fallen to a attractive price level. You are sure of your chosen stock. This is the day you make your killing. Have a great begini g !!. Best wishes.

    • Hope you did not buy last week and waited… Mr. Kumar’s words were prescient, nay prophetic… I am sure most of the stocks you researched to buy and had your eye on are trading at atleast 5% discount if not more! See how the market trends and then buy. Good luck and don’t forget to thank the Gentleman for his sage advice…

  7. Not good. Very high valuation & price. After listing then buy. This ipo & also sbi life ipo very high price. So this two ipo stay away friends……

  9. No doubt it is overpriced but let’s not forget the business is good. At some price, it will start making sense.
    I’ll be a buyer if it lists at a discount. Did the same with ICICI Prudential and made more than 10% returns in a month.

  10. P/E is not very relevant in looking at valuations of Life Insurance Companies. This is because all expenses and provisions are made in the year when the Premium is received while Profits are realized in future years. This is captured in Embedded Value (EV) which is like Book Value for other Businesses. To value these businesses look at P/EV and ROEV. ICICI Pru is a bargain at a P/EV of only 3.78. The ROEV is 18% and the Business is growing at over 40%. This is a business with no debt, very little competition, high barriers to entry and 40%+ growth. By contrast SBI Life at 700 (assuming it will get no premium on listing) has a P/EV of about 4.25. HDFC Life Issue will be at a P/EV of not less than 4.5. Buy ICICI Pru for a target of over 550 in less than a year.

    • How about the risk of claims when some disaster happens ,say, a terrorist act, accidents etc? Just see the burden of claims on Insurance companies when 9/11 happened.

      • Less than 2000 people died on 9/11. It makes no difference to a life insurance company which has insured over 20 lac people. Yes the difference is greater in a General Insurance Co if a disaster happens but this happens once every 5-10 years and in fact increases business as also premiums making the business even more profitable.

    • Agree. It will most likely not make any fancy at listing but can give good returns for longer time period. Overall business is good, high entry barrier, huge potential for the industry, new business premium growth and also better priced compared to SBI life.

  11. Jis ko apply karna gai kare jisko nhi karna mat kare koi jabardasti nhi hai kisi se poochkar apne paisa kyon barbaad karna khud research karo ke kahan paisa dalna chahiye kuchh log fokat ka gyan bat te phirte hain high value low value sebi wale bewakoof hain badi institute bewakoof hain

  13. Though price seems to be on higher side, I think for first year it will give us more than F.D. interest. Subsequently big funds will take interest and this share seems will give a decent return.

  15. Listing at discount for sure! Friday gave a strong indication and NK seems to have tested another bomb. Time for free fall in equities and overpriced bets like this will lead the decline.

  16. GMP is 300-400. Got to know from ICICI Lombard Internal management. Don’t fall in trap of selling at loss or discount listing , it is an corporate game for purchasing at lower price than issue price.

  18. GMP is an indication – accepted
    But ICICI Lombard is a fantastic company with top notch management . It’s financials give an easy information about the profits and revenues . Invest for gains and Invest in the company with good roots – is the norm for IPO . This company is the first of its kind to enter into the market with an excellent track record of highest order . Check out for the response from those who have not invested on Wednesday – they will pounce on this growing segment of the market .

    • Do not purchase ANY ICICI Lombard product. The company may go bankrupt any moment now. They are desperately looking for a buyer for the company. The IPO is just an attempt to boost the company’s valuation before they close the deal with one of the buyers they are currently in talks with.

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