ICICI Lombard General Insurance Company Ltd (ICICIL) is a joint venture between ICICI Bank and Fairfax Financial Holdings. It is India’s largest private sector non-life insurer covering – Fire, motor, aviation, health, casualty, home, marine and travel. The company is also involved in reinsurance, insurance claims management and investment management services.

In FY17, ICICIL had a market share of 8.4% (based on gross direct premium income) and an 18% market share in the private sector non life insurers.

Objectives of the issue:

Avail the benefits of listing equity shares on the stock exchanges
Enhance the brand name
Provide liquidity to existing shareholders

Issue opens on 15th September, 2017 and closes on 19th September, 2017.

Price Band is Rs 651-661; 8.625 Crore shares are on offer in this issue which has a size of ~ Rs 5,700 Crores.


India is significantly under-penetrated in the non-life insurance sector. The below table shows the comparison between India and other countries:

The under-penetration presents an excellent opportunity for the industry to grow.

ICICIL is the first private sector non-life insurer to reach Rs 10,000 Crores GDPI. Between FY15-17, the company’s market share increased from 7.9% to 8.4%. The company also has a diverse range of products with Motor contributing roughly 42.3% of the GDPI.

The company has also diversified in terms of customer profile from a largely corporate focused model which it had earlier. Now, retail (including SME) contribute 60.4% of the GDPI, while corporate contributed 17.5% of the GDPI.

  1. Premium income has increased at a CAGR of 12.26% between FY14-17 and the PAT increased at a CAGR of 4.07% in the same period
  2. The company had reported losses between FY09-12


Despite intense competition in the non-life insurance market, ICICIL has increased its market share with double digit growth rates in both FY16 and FY17. Its primary competitors are the public sector insurers (New India, United India, National Insurance and Oriental Insurance) and other private sector players. There are a total of 30 insurers operating in the segment.
  • At the upper price band of Rs 661, the issue is valued at 47x its FY17 earnings and at a price to book ratio of 7.7; this is at a steep premium to other listed financial companies.
  • Though the segment has many growth opportunities, the growth rate in premium income doesn’t justify the “opportunity size” yet.
  • The growth rate in profits doesn’t justify the high premium rates that it commands.
  • The price-to-book ratio of 7.7 is steep and offers not much room for expansion in valuations.
  • Even listing day gains appear to be limited due to these valuations. There is not much left on the table for investors.

Our recommendation for investors:

Listing Day Gains: Do not apply
Long term investors: Do not apply