NSE IPO: Underperforming insurance stock surges 13% on hopes of big windfall as selling shareholder

NSE IPO: Underperforming insurance stock surges 13% on hopes of big windfall as selling shareholder


Shares of The New India Assurance Company Ltd. surged as much as 13.5% on Thursday, June 18, after the name of the company appeared in the names of selling shareholders in the Draft Red Herring Prospectus (DRHP) filed by the National Stock Exchange (NSE) last night, ahead of its mega Initial Public Offering (IPO).

This is the fifth straight day of gains for the stock, during which the stock has risen 28%.

NSE’s DRHP disclosed that New India Assurance Company will be selling up to 1.05 crore shares of NSE during its upcoming IPO. These shares carry a face value of ₹1 each.

New India Assurance will be set for a major windfall through this IPO, as the cost of acquisition of their shares has been listed as only ₹0.32 per share.

The Mega NSE IPO

NSE disclosed in its IPO papers that it will be selling 14.89 crore shares as part of its offer, which will be a complete Offer For Sale (OFS), meaning that NSE will not receive any proceeds from the IPO.

The IPO size is said to be between ₹30,000 crore to ₹32,000 crore, which will make it the largest IPO in Indian history, surpassing Hyundai Motor India’s 2024 offering, which was worth over ₹27,000 crore.

New India Assurance’s Underperformance

Shares of New India Assurance are the top gainers on the Nifty 500 in today’s trading session. The stock is also gaining on strong volumes today.

As many as 4.1 crore shares of the company have changed hands this morning so far, compared to its 20-day average of 2.7 lakh shares.

The five-day rally in the stock has taken it past all of its key moving averages, having surpassed its 200-Day Moving Average (DMA) of ₹163.78 as well on Thursday.

However, the stock has been an underperformer, still trading over 50% below its bonus-adjusted IPO price of ₹400. The state-run insurer had issued a bonus shares in the ratio of 1:1.

Shares of New India Assurance are trading 12.8% higher on Thursday at ₹186.4. The stock is up 20% so far this year.



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