Monday, December 4, 2017

Edelweiss ULIP Rewards the Policyholders for Making Disciplined Investment and Staying Invested

Since IRDA started a mission to protect consumer interest, Insurance companies adjusted to the new normal and are now getting a step ahead to service their policyholders in lower cost and efficient claim management. Also, the disruptive technological space has helped them to lower their overall costs. However, it is truly the customer obsession approach, which has enabled Edelweiss Tokio Life to come up with a unique ULIP product, whose cost claims turns out to be lower than direct mutual funds (equity), if one chooses the 20-year pay term for 20-year policy at below 1.5%.  

While this looks too good to be true, the Edelweiss team calls it #Unyakeenable. In this post, I intend to write all the nuances you must know about the plan, and the best option available in the plan.

Edelweiss Tokio Wealth PlusThis is an insurance-cum-investment plan which invests the premium. The feature of the policy is they invest 100% of the premium into the investment and charges less than 2% over a 20 year period for the fund management fee and mortality charges. The aim of this insurance plan is to give superior investment return while covering ten times the annual premium as the sum insured.

The cost and the investment returns are comparable to direct Mutual Funds returns.

Features of the Wealth Plus
·         Entry age – 1 year onwards
·         Policy term – 10 year to 20 years
·         Payment term – 5 – 20 years
·         Payment frequency – monthly, semi-annually, half-yearly, and annually
·         Minimum premium – 48,000 a year for a minimum of  10-year payment term
60,000 Rs. A year for more than 10 years term

·         Investment options – Investors have an option to choose one of the following investment strategies based on your profile and risk appetite:
Life stage and duration based strategy – Company manages the asset allocation based on the policyholders’ age and remaining years to policy maturity
Self-Managed Strategy – For a savvy investor, money will be allocated to your choice of fund(s)

The funds the plan invests in are highly rated (4 STAR and 5 STAR) by the international rating agency Morning Star.

Highlights of the plan
·         80% of the annual premium is reinvested by the insurer in what can be termed as loyalty program by the common man. Every year, for the first 5 years, the insurer adds 1% of the premium to the investment. From the 6th year to 10th year, the company adds 3% each at the end of the year. 11th to 15th year, 5% of the premium is added, and 15th to 20th year, 7% of the annual premium will be added
·         Top- up facility available, minimum amount Rs. 5000
Point to Note – This feature is applicable depending on the payment tenure decided by the policy holder. Higher payment term one choose, higher return one get

Rising Star Benefit
The best part of the plan is their Rising Star Benefit. While it is a long-term commitment, one may choose it for protecting their child’s future. In this option, both the parent (policy holder) and child are insured.

Who Should Buy this Product?
It is important to know what are you buying and why. This is a great investment product if you have a long-term commitment and minimum Rs. 48,000 a year. This plan is a great buy for goals like child education or marriage plan or retirement. To make maximum of this insurance plan, start early and choose the 20 years premium term and 20 years policy term.

What is in it for the Insurer?
One should ask this question to oneself when any investment offers return higher than usual industry standards. In the current scenario, ULIP charges 3-5% on the investment yearly to manage various expenses like management fees, brokers/agents, marketing channel, and even customer acquisition activity, paperwork, etc. To minimize the cost, Edelweiss has come up with a win-win situation; they are rewarding the customer for continuing investment for 20 years, by incentivizing them with extra units every year - 1% for the first 5 years, 3% from the 6th to 10th year, 5% from 11th to 15th year, and 7% from 16th to 20th year. This means, the longer you invest, the higher the percentage loyalty addition you get.
Through this plan, the insurer is able to give the best in class return as they reduce customer acquisition cost. It is only available online on Policybazaar and Edelweiss Tokio website.

Wednesday, November 29, 2017

How to use your accumulated wealth systematically for retirement or sabbatical

The discussion is always on planning a new thing, making a new investment, buying a new car, seldom we think or plan on how to wrap-up. What to do with the proceeds of fixed deposit maturity amount or an insurance payout. Planning helps, not only in beginning also in wrapping up and moving on. What after we reach the goal, after our equity investments hit the target, it is equally important to have systematic process to sell-off your investments utilise the proceeds.


Everything has a shelf life or an expiry date, however rude may it sound, human too are born with an expiry date. We don't see things ending, we dieing, losing, we like clinging to our stuffs and dont make most of our investments. If we take a case of the investment world, we don't often refuse to see the asset class dooming. We love to ride the bull, and anxiety bites when bear strike! Every asset class has its performance cycle and as an investor aligning our goals with the performance of the asset class is important. Even financial investments too have expiry dates. Like life insurance comes for a term and fixed deposits come with maturity date.
For the instruments which doesn't have an expiry date need to have a periodical review on their returns. I am not here getting into the physical assets like gold , yet will have a pointer on real estate investments. I am focusing on financial assets like equity and open ended mutual funds especially. 

What do you do with asset class which are perpetual in nature like equity, open ended mutual funds and even ULIPs with long term 20 year maturity period. Return on the equity is amazing on the long term. But how long is long for you is purely upto your goal and comfort level. Also, equity market with its long term wealth creation is known for its volatility. Any investment should be attached with a goal. It could be retirement planning, child's education or summer holiday in europe. If we use-up the sum for a particular goal, we are sorted. But if the sum is saved-up for a retirement or a sabbatical, here are few ways you could look at - 

We could have few systematic process to make the most of financial plan at every stage of life.

Few ways to use the accumulated wealth-

Systematic Withdrawal Plan - Exactly the same concept of SIP, in this process you could chose a specific sum or units for withdrawal from your folio, which will be credited into your designated bank account, with this you will have a regular income every month. chosing a hybrid or short term debt fund is an ideal option for this.

Monthly income plan - A lump-sum amount, proceed from PPF/ EPF or full and final settlement can be put under such scheme. MIP schemes are debt heavy funds, with marginal equity exposure upto 30%, making it more consistent on returns. However, the dividend is not guaranteed, subject to the performance of the fund.  

Deferred payment on Insurance proceeds - Incase of unfortunate demise of an earning member of the house, assuming he/ she would be insured, the nominee is entitled to get a lump-sum amount of the sum-insured. Often the nominees are unaware bout how to prudently use the money, it is a good option to chose deffered payment options to secure regular income for a long period of time.  

Reverse mortgage of house - This is still unconventional concept in India, but it is taking shape. For anybody above 58 years, this is an option for regular monthly income. In simple words, this is exactly opposite to conventional home loan. Ideally for senior citizen, is the borrower pledges the property to a bank and get a regular income till the end of his life. The bank in this case disburse loan periodically to the house owner, end of the term, bank takes the house or sell it, additional amount if any from the proceed of the sell is passed onto the legal heir.

It takes sweat, blood and discipline to create wealth, but once it is created, we must be prudent in-terms of utilising the proceeds with prudence. Happy investing, happy spending. For any query on money management I am accessible at #how-to-use-your-accumulated-wealth

Tuesday, November 14, 2017

Do you have the Moolah to buy your desires? Budgeting will help

This article is written by Guest Author Ms. Nayan Thapar, a personal finance enthusiast and pursuing post graduation in communications. Views are welcome at

You wish to buy a house? A car? Or let’s say you are this “I love to travel so let’s pack our bags and go on an adventure trip” kind of a person. But, the fact that there isn’t enough money in your bank account to fulfil your whims and fancies, you cease to live life the way you want to live. You somehow always end up restricting yourself and ultimately, just get used to the life that lacks impulse.

From the blog - Create wealth with conviction and planning

In order to provide a cushion to your dreams, here are some tips that could ease your financial pain in no time. So to be precise, let’s talk about the ‘B’ word: Budget

·         The little things; #thatmatters
We joke about these little things but at the end of the day, these Lilliputian efforts that you put in, really matter. Giving an example would make a difference. As a student, you are always late to catch the college bus that you get as a service and instead you end up taking an Uber or an Ola because you want to be in class before 10 am. Now, that costs you around 30 bucks which is insignificant but when we calculate it in our monthly expenses, it sums up to about 900 which “could” have been used as your bus ticket to the next destination on your travel bucket list. Does it make sense? I think, it does.
·        Confessions of a shopaholic
Everybody understands when we talk about impulse buying because everybody has gone through that phase at some point in their life and everybody has gone on a major guilt trip now and then. The question is how do we curb this feeling? Well, now that we are staying in a world full of digital heads, there are so many apps which can help us keep a check on the kind of purchases that we make and in which areas we end up splurging on. Apps like Walnut, MoneyManager and Monefy can actually curb your urge to splurge!

·        Get set Goal
Set a monthly as well as an annual aim or a short term and a long term goal, according to your suitability. It just makes things a lot simpler. You already have a pathway on how you have to go about throughout the month and it won’t come out as a shocker unlike the times when you suddenly realize that you are underpaid or you fall under the ‘urban poor’ bracket.

·        Strike a happy medium
Balancing your way through is essential. Every month, when you plan your checklist, categorize on where you want to extravagantly indulge and where you can cut down on your expenses to balance out your expenditure.

If you make these miniscule changes to your financial calendar, then there is a definite chance that you might bag some bonus trips and getaways or might end up purchasing more than what your pocket allows (but that is helpful sometimes and not all the time).

Wednesday, October 11, 2017

View of an inquisitive average Indian investor

Yes, that is about me, the restless soul whose twinkling eyes forever stuck at the nifty graph! :)

2016-2017 have been quite a roller coaster ride for Indian Stock markets. Various factors have driven the Nifty to all time high and the bulls are not ready to hang their boots just yet. Having a sixth sense and lot of love for the markets (not to be confused as an expert, I am just an enthusiast in Investing) the current valuation makes me jittery. Keeping some extra bucks aside each month has been a practice for sometime, I am itching to invest it in the markets. However there are number of factors which is driving my mind towards fixed income space, here are few of them. 

Nifty 50 is trading above 25 PE. This is a dangerous level. In markets language, or whatever I can make if it is a valuation of 12-14 PE ratio is some how a fair valuation as an entry point. I am going sector agnostic. Every sector has its own metrics to decide on, for FMCG it is a little higher at around 18-22 PE. Trying for a better investing approach, I looked at individual stocks at specific sectors (I am talking about my favorites) are trading above 40 PE. All companies are good. But every thing has a fair price, premium for a better business proposition, but at the obnoxious valuation they are trading at, I feel its best to stay away till markets correct or company performance catches up with the current valuation. 

India is at its 'super feel good days'. Everything looks beautiful with new initiatives, disruptive steps by government, and continuous inflow of domestic institutiinal investors through mutual funds. Evergreen Indian consumption story is now selling double with Make In India tides. FII selling is not having any impact on the markets as domestic institution buying in every opportunity and pushing up valuations. Too much optimism may not neccesarily result into too much profit.  I am better off as a cautiously optimistic individual. 

GST not settled just yet, I believe this is an teething issue, and certainly believe, some of its impact should come on the coming quarterly results and market movements, giving some opportunity to buy in dips.

In the given scenario I often feel uncomfortable to buy new companies for my portfolio. But, my investment centric mind doesnt let me stop. I have figured out following few options to cautiously participate in the market yet staying away from being over zealous.

1. Continuing my SIPs in equity and hybrid mutual fund schemes. These are long term investments. I am continuing these for over 3 years to 5 years. Hence, the average cost of buying the units is pretty low compared to the current price. A dip in the market unlikely to blow away my capital.

2. Buying add on MF units on dips. Though overall marker remains highly priced, there are days when consecutively 2 or more trading sessions have been victim of profit bookings. I make some add on investments in my existing mutual fund scheme. I dont believe in bottom fishing, hence stick to a minimum amount and maximum 2 trades per month, discipline is the key for long term wealth creation. I even buy the nifty bees and junior Nifty, the Index funds on those days.

3. Investing in quality IPOs  - Given the optimistic markets condition, there have been an avalanche of equity IPOs this year. Being a small investor, I stay away from SME IPOs, as it has a huge monitory commitment (upwards of 1 lakh rupees for each). But I am always in look out for good IPOs. Few IPOs I applied for this year were BSE, CDSL, MBL, Dixon, Capacite, D-mart. Ofcourse I am not the only intelligent retail investor. Hence, most of the issues were super success with huge multi-times subscriptions. Hence, I was lucky to get three of the ten IPOs I applied for. No qualms to say, I made an average 60% profit on my investment and exited on the very listing day. One of the reasons of exit is IPOs are often highly priced compared to their valuation, so opportunity of cashing in on listing day looks safe to me.

4. I did invest in some debt funds. Interst rates going southwards, that was the only way to earn some extra bucks on cash. Fixed deposits rates are at multi year low, liquid and ultra-short term debt funds are at position to give 1-3% extra income on your idle cash. This money will be also used incase there is a significant correction in the market.

5. Though I dont recommend the stocks per say, but still these are learnings. Crisis many a times turn out to be an buying opportunity in equity market, if the stocks are like Infosys and JKumar Infra. Sudden news of shell companies being banned and erronously including JKIL in the list resulted in shedding a chunk of market cap on JKIL. It has given a brilliant entry point to the investors. Infosys management issues also has a similar story to tell. However I am not a certified stock analyst and their future growth potential needs to be studied well incase one makes a buying decision.

Investing is an art and science, and I am learning it with time. The insights and experience I share in hope that it eases some stiff negative and scary ideas about investing. Financial planning and managing money is fun.

Here is a low down on few more ideas you can look at at this point of time, are - 

1.If you have an existing investment in the market with a high profit in the book, and feel the PE is stretched beyond comfort level.You may look at booking partial profit if not full (assuming the equity investment is more than a year old,and the return is tax free). Parking this money in liquid funds/short term debt funds is wise, untill you see a good bet. If you are savvy investor, you can consider parking someportion in the FMCG stocks (I call them Evergreen).

2. If you have accmulated cash, and you may also park the cash in liquid fund, and using STP (systematic transfer plan) invest in equity mutual funds.

Would love to hear what are you doing in your investments given the current market conditions. Share your ways of inveating. Look forward to hear. If you like the post, do share and comment.  

Friday, October 6, 2017

Be disciplined and grow rich!

Building a good habit takes time, nurturing and care. Determination and discipline takes you a long way. One of such habits we have inherited from our wise elders is 'savings'. I must also accept that the world has changed incredibly in last few decades and so the way we save money has also seen a major shift. 

In this ever changing world, the savings have shifted from real estate and gold to PPF and mutual funds, for few lucky ones its private equity and bitcoins! What I would like to focus in this post is not the tool but the discipline by which wealth can be created and enjoyed. A discipline of regular savings, discipline of curbing frivolous expenses can not only make you richer, it also makes you a responsible  and a content individual. The following 5 habits would definitely make you richer next year, if you follow them with sincerity, wether or not you get a salary hike! 
Spend as much is required 

The famous investor Warren Buffet, who has created huge wealth almost equivalent to GDP of a small country is frugal. He stays in 3BHK apartment since last 30 years. And he openly endorse the concept of 'being frugal'. One of his famous quote is "if you buy something you donot need, soon you ll have to sell something you need".

When you itch to buy that iphone latest series, just ask yourself, is it worth it to spend 80 thousand on the gadget. What would be its resale value. How long are you going to use it? What is the purpose of the phone. What is the value is it adding to yout life and what are the 5 important areas you need to spend on where those 80 thousand will make a big difference.

Follow a discipline in saving
How about chucking that hollow calorie filled grilled sandwich you eat daily for Rs. 50. Just shifting to a health snack of a fruit or a box of munchies from home would save the whole money. Do you travel that walkable distance from home to railway station for Rs. 18 each side making it Rs. 36 daily while commuting to office. Does your extra cup of sugary cutting chai cost you 20 bucks a day? If you calculate, cutting some of your unhealthy habits and walking that extra mile would save you a neat 100 bucks daily. 22 wotking days make it to about Rs. 2200. Do you know a one NCFM certification in financial markets cost you less than this. And you can add that in your CV too! 

And saving 2200 bucks per month would make you richer by Rs. 26,400 a year.

First Save then Spend 

In some personal finance book I read this- first pay yourself. You are definitely wrong if you think I am talking about shopping. 'Pay yourself' here signifies securing oneself financially. Protecting with future income, insurance from risks and contingency for uncertain situation. You should also take out some money for personal upliftment, skill development and nurturing yourself. You are your biggest asset.Investing in yourself will yield you much more return than any external investments.

NPCI - Enabler of the Indian cashless dreams  

Give back to the society 
The most common traits of the richest people in the world are they are also biggest philanthropists, be it Bill Gates or Warren Buffet or Mark Zukerberg, all of them have pledged large part of their fortune for noble cause for humanity and world at large. 

You may argue and you are right at that. You are not Mark Zukerberg. But you have a way. And a great way. The money you saved cutting your everyday expense, can be used in some productive way, like providing for needy, sponsoring education for maid's children, helping your maid with some medical expenses etc to name a few which can be done way within your means. The immense satisfaction it gives, can fill you with whole new enthusiasm of growing rich to give it back! 


Wealth is not only bank full of money. Wealth signifies sustainable and balanced life, where needs are fulfilled at ease and there is always more than required. Recycling is one way of doing it. Recycling goods doesnt only help saving environment, it also can help reduce a chunk from your monthly budget.

Earning big money is onething. But rich is whose expenses are much less than income. You can only become rich when your expenses are in control. A person who is earning a million dollar and spends the whole money is not riche than someone who earns 10 thousand and saves 2 thousand.

Your water tank will never fill if it has a big hole at the bottom.  It is about managing money and not only earning. 

Monday, October 2, 2017

On what basis we should decide to invest in which mutal funds?

On what basis we should decide to invest in mutual funds?

I found this question on quora, and for a moment I found this question inadequate to respond. Then I realised that this is a common question i come accross from many of my friends and relatives. And decided to write a post which may not be exactly comprehensive, yet it will lead to a better idea about mutual fund investments.

So my reply ------

This is a very broad based question. Still to answer you, mutual funds is an amazing investment tool. It is very flexible way of investment for investors where one can choose equity, debt, gold etc as an underlying asset depending upon the financial goal. 

Broadly in India, there are equity mutual funds, debt funds, gold funds and hybrid funds. There are sub categories under these to suit investors' needs.

Happy Loans

If one have an ultra short term goal of 0–12 months - chose luquid funds/ ultra short term debt funds

Goal - 12- 24months - you may look at short term debt funds, dynamic bond funds, credit opportunitues fund, even long term debt funds

Goal 24 - 36 months - you may look at debt hybrid funds, 0–30% equity 70- 100% debt. These funds give stability of debt rerurns, yet give an opprtunity to invest in equity which has higher return potential. However, it has a tax treatment like debt investment.

Goal - 36 - 60 months - one may consider  investing in (SIP) equity oriented hybrid funds with 60–70% equity and 20–30% debt. They give a significant exposure to equity with a nice cushion against volatitility with debt exposure. These funds give tax free return after 1 year.

If you have goal 5 - 8 years away, choose a large cap fund and invest through SIP.

Any goal beyond 8 years, do some research in mid-cap small cap funds.

If you are more specific and comfirtable sharing details interms of your goal, your age etc, would be able to help you with more specific information.
If you want to know more specific, do mail me at or tweet me @debashree_ad

Happy Loans for small business

Friday, September 22, 2017

Financial awareness - planning helps

Win Rs. 500 BookMyShow Cash - Fortnightly.. now you can participate till 9 am on 3rd october!!

Rs. 250 PayTM Cash for participants who participate 5 quiz consecutively and given right answers, and not won the fortnightly prize. Entry for the quiz closes on 30th Sep, winner will be announced by 3rd October

About the quiz - (You need to do all 4 steps correctly to be eligible for the prize)

To participate, you need to do the following - 

1. Follow the blog mymoneystreets
2. Like this on Twitter page , tag two friends and retweet (LINK) use #IamFinanciallyAware #mymoneystreets 
3. Post the answers in comments section in the post
4. Only one entry from one participant

The winner will be chosen with a lottery from all the correct answers, and contacted.

(Only Indian participants)

Quiz : 

1. Which of the following investment does not comes under 80c purview?

a) Tuition fees  b) Premium for life insurance policy c)interest repayment for housing loan d) principal repayment towards housing loan

2. The returns earned from equity mutual funds are tax free if the investment held for minimum of - 
a) 6 Months b) 1 year c) 2 year d) 3 years

3. What is contingency fund - 
a) Money kept aside for travel and movies
b) Fund for Tuition fees
c) Money kept aside for emergency situations like accident/ sudden illness/ job loss
d) None of the above

4. You should start saving money - 
a) As soon as you start earning
b) After marriage
c) When you need a downpayment of some loan
d) When your child grow up

5) SIP (Systematic Investment plan) in equity mutual fund helps in - 
a) Investing in discipline manner
b) Help fighting market volatility
c) Create wealth over long term
d) All of the above

6) What is a pure life insurance?
a) Term plan
b) Savings plan
c) Guaranteed plan
d) ULIP Plan

** End**

NPCI the enabler of India's dream of less cash society

Tuesday, September 19, 2017

NPCI the enabler of India's dream of less cash society

True partner of the "transformational growth" Indian economy undergoing, NPCI conceived and launched series of products and services to ease the cash situation in India especially during the time of demonetization. Indian citizens and merchants, a special focus to the general public and small merchants were greatly benefitted by the initiative.

NCPI,  the umbrella organization was created to address the need of payments system of India jointly by Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) is a not-for-profit organisation. Over last five years, the organization has worked relentlessly to come out with world-class products and services to match the needs of the hour.

In this post, I would like to talk about the products and services on payments especially designed for common man, and their phenomenal features we are not much aware about the products. Though the NPCI initiatives have benefitted both individual and merchants, this blog aims to reach out to common man, and going with the tradition I would focus on the initiative taken for the general public

UPI - Unified Payments Interface (UPI), pilot launch with 21 member banks was first launched in April 2016. It first allowed Indians to do “Peer to peer” transactions. Available to smartphone users, this app was the first to merge multi banks functions under one App.
Benefits for end Customers are round the clock availability, single application for accessing different bank accounts, Use of Virtual ID is more secure, no credential sharing, Single click authentication, raising complaint from Mobile App directly.

BHIMLaunched on 30th December 2016, this UPI app was designed for both smartphones and feature phones. The Adhaar based app launched *99# service for wide base of feature phone users in semi-urban and rural India proves to be a true partner of the financial inclusion drive. App available on play store and i-tunes, the main objective is to get every Indian onboard to the digital payments system.  

User just needs to link his/her BHIM App to the bank accounts and use host of featues which was previously available to net banking customers. The features actually helped converge many functions into one The features includes – Send/ Receive money, Scan and pay, and do transactions.
With creation of Virtual payments address, users can safely transact without divulging accounts details, it also made the experience much smoother compared to the other existing transfer process. It made the transactions instant.
IMPS – Fastest online banking transaction, IMPS first launched on pilot basis in the year 2010. It is a fee based service compared to percentage based remittance services.

Rupay – RuPay was introduced as linear extension of all other products available in the payments system. Having a long run by VISA and MasterCard, RuPay is our own Indian Payments  card. Available in credit, debit and Pre-paid category it is an complete offering of plastic money. Competitive pricing and global partnership with Discovery, makes it an emerging leader in the category

According to news reports, the digital transactions have grown exponentially over last decade. The introduction of these innovative products and services empowered the common man of India. No more standing in banking queues and sending cheques. The digitization also likely to help a lot on documentation, keeping a prudent check on money laundering and terror financing.  

Wednesday, September 13, 2017

ICICI Lombard IPO - Details and review

About the company -
Image result for icici lombard ipo proceeds of the issue

ICICI Lombard IPO - Maiden IPO by Non-life Insurer

#ICICI Lombard is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017,  being one of the first few private-sector companies to commence operations in the sector in fiscal 2002, according to the CRISIL Report. They have well-diversified range of products, including motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels. They were founded as a joint venture between ICICI Bank Limited, India’s largest private-sector bank and Fairfax Financial Holdings Limited, a Canadian based holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management with US$43.38 billion of total assets at December 31, 2016.

In fiscal 2017, 87.5% of their new policies were initiated electronically, either by our distributors or  customers. No. of policies grew at a CAGR of 13.1% between fiscal 2015 – 2017. Their per employee productivity, measured in terms of gross direct premium income per employee, increased from Rs. 114 lakh in 2015 to Rs. 166 lakh in 2017, representing a cumulative annual growth rate of 20.7%.

It enjoys a diverse customer profile base including large and mid-sized corporates, MSME, central and state governments, and individuals. In fiscal 2017, our retail (including SME), corporate and government business groups contributed 60.4%, 17.5% and 22.1% of our GDPI, respectively. For the three months ended June 30, 2017, our retail (including SME), corporate and government business groups contributed 54.3%, 23.2% and 22.5% of our GDPI, respectively.

Financial Performance
In Rs. Crore               
FY 17
FY 16
FY 15
FY 14
FY 13
Total Assets

Industry Overview
The Indian non-life insurance sector offers different products such as motor, health, crop, fire, marine, liability, travel, aviation and home insurance aimed at meeting different protection needs of retail customers, government as well as corporate customers.
According to CRISIL Report, The size of the Indian non-life insurance sector was Rs. 1.28 trillion on a GDPI basis as of 31st March 2017. Indian non-life insurance sector GDPI grew at a CAGR of 17.4% between fiscal 2001 and fiscal 2017. According to Swiss Re, India was fifteenth largest market in the world and the fourth largest market in Asia in 2016, behind China, Japan and South Korea. India was also amongst the fastest growing non-life insurance markets over 2011-2016, growing at 14.5% (as per Swiss Re). Despite its size and growth profile, India continues to be an underpenetrated market with a non-life insurance penetration of 0.77% in 2016, as compared to 1.81% in China, 1.70% in Thailand, 1.67% in Singapore and 1.62% in Malaysia and a global average of 2.81% in 2016. At US$13.2 in 2016, insurance density also remains significantly lower as compared to other developed and emerging market economies.
Multi-Product Insurers:
Four public sector companies offering multiple products – National Insurance Company Limited (“National Insurance”), The New India Assurance Company Limited (“New India”), The Oriental Insurance Company Limited (“Oriental Insurance”) and United India Insurance Company Limited (“United India”)
o 18 private sector companies offering multiple products – including ICICI Lombard General Insurance Company Limited (“ICICI Lombard”), Bajaj Allianz General Insurance Company Limited (“Bajaj Allianz”), HDFC ERGO General Insurance Company Limited (“HDFC Ergo”), IFFCO Tokio General Insurance Company (“IFFCO Tokio”) and TATA AIG General Insurance Company (“Tata AIG”). There are also single product insurers.
Besides these 30 companies, the state owned General Insurance Corporation of India (“GIC”) operates as the main Indian reinsurer.

About the Issue 

With the IPO, ICICI Lombard likely to mobilise upto Rs. 5700 crore, offering 8.62 crore equity shares in a price band of Rs. 651 to Rs. 661.

IPO Opening and closing date – Sep 15 – Sep 19, 2017

Face value -  Rs. 10

Lot size – 22

Allotment portion
Upto 47%
14% and above
Reserved for ICICI Bank shareholders
33% and above
Shareholding pattern of promoters post IPO

IPO Proceeds to be used in – #ICICI Lombard is the non-life Insurance company to offer IPO. Promoters to dilute 19% in ICICI Lombard's Rs 5,700-cr IPO. IPO proceeds are not going to the insurers. It is a pure stake sale by the promoters

Mymoneystreets Take on the IPO

The company’s has registered revenue growth of 25% over last five years. Its profits have grown at a CAGR of 65% over last five years. On the upper price band of Rs 661 for FY17, its PE is at 46 times. IPO proceeds are not going to the insurers. It is a pure stake sale by the promoters. The pricing of IPO looks high.
The brand is promising, however, there are no competitor listed on the bourse. Highly under-penetrated sector likely to see a robust growth over long term. Subscribe this IPO only if you have a long term view.


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