Started in 2000, Reliance General Insurance Company Limited is among the five largest private sector general insurance companies in India. Company offers a comprehensive and well-diversified range of insurance products in the motor, weather and crop, health, fire and engineering, and marine insurance sectors, as well as in other miscellaneous insurance business lines, which they provide through multiple distribution channels. Company also participates in a number of insurance schemes promoted by the Government, notably in respect of weather insurance, crop insurance and mass health insurance. As at June 30 2017, in addition to company's own direct distribution through their branches, call center and website, company's extensive multi-channel distribution network comprised individual and corporate agents (including bancassurance partners and NBFCs) as well as a significant number of brokers, and other intermediaries such as web aggregators. According to the ICRA Report, RGICL's distribution network comprised the highest number of individual agents of any private sector company in the general insurance industry in India. On performance front, RNLAML has posted turnover/net profits of Rs. 712.67 cr. / Rs. 198.96 cr. (FY13), Rs. 784.03 cr. / Rs. 302.30 cr. (FY14), Rs. 930.11 cr. / Rs. 349.59 cr. (FY15), Rs. 1271.07 cr. / Rs. 390.12 cr. (FY16) and Rs. 1400.44 cr. / Rs. 405.57 cr. (FY17). For three months ended on 30.06.17 of the current fiscal, it has reported net profit of Rs. 83.44 cr. on a turnover of Rs. 378.15 cr. Thus company has posted healthy growth over last couple of years on consistent basis. RNLAML has posted an average EPS of Rs. 6.68 and average RoNW of 22% for last three fiscals. Issue is priced at a P/BV of 8.97. It has no listed peers to compare with as per DRHP. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 43.92. As there is no peers to compare, so its difficult to say what will be proper valuations.. As per financials, company's growth is good, RoNW is 22% for last three fiscals and issue is priced at P/E of around 44. Mutual Funds and Asset Management sector is growing at good pace and expected to continue same growth for next couple of years and being one of the largest player of sector with wide network across the country, company expected to show same growth for next couple of years. So we give SUBSCRIBE rating to this IPO.
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