4 Major Reasons Why Insurance IPOs Are Being Favoured

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Insurance IPO have been given a good response in light of a few facts. And after ICICI general insurance IPO, SBI Life and other players are set to the primary market. Know why brokerages are largely positive on IPO issue of insurance companies.

4 Major Reasons Why Insurance IPOs Are Being Favoured

1. Growth potential of the Insurance industry: First and foremost companies in the sector have made their mark in the sector after spending crores of rupees and after their foray their mark cannot be displaced.

At the same time, less penetration and increasing market share is only going to add to the fortunes of these companies in coming times.

2. Financials: Several factors including demographic reasons, crop insurance issuance, health and auto insurance penetration are only set to increase YoY growth for companies as well as increase their market share. So, any funds raised through the IPO route and diverted in the company's business shall only reap fortunes for investors if not immediately but for surely in future.

3. Valuations and Long term growth support cannot be neglected: As in the case of ICICI Lombard's IPO, valuation is quiet steep but considering the huge growth potential the sector offers, the issue is a good bet considering long term outlook.

4. Private players are gaining more market share: So with tremendous opportunities that the sector offers, a handful of private players is doing all its bit to gain market share.

Goodreturns.in

Story first published: Saturday, September 16, 2017, 12:20 [IST]
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