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
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