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Sensex Up Over 200 Points; Telecom Stocks Witness Buying
Mon, 18 Sep 11:30 am | Monish Vora, TM Team

After opening the day firm, stock markets in India have continued their momentum. Sectoral indices are trading on a positive note with stocks in the capital goods sector and telecom sector witnessing maximum buying interest.

The BSE Sensex is trading up 204 points (up 0.6%) and the NSE Nifty is trading up 72 points (up 0.7%). The BSE Mid Cap index is trading up by 0.8%, while the BSE Small Cap index is trading up by 1%. The rupee is trading at 64.02 to the US$.

In the news from IPO space, Dixon Technologies made a stellar debut today as the company's scrip got listed at Rs 2,725 on BSE and NSE, a premium of around 54% over its issue price of Rs 1,766.

The company had raised Rs 6 billion through IPO, which got tremendous response from all the category of investors. The issue was over-subscribed 118 times, receiving bids for 280 million shares against the total issue size of 2.38 million shares.

Dixon Technologies (India) Ltd. is engaged in manufacturing products in the consumer durables, lighting, and mobile phones markets in India. The company's product portfolio includes consumer electronics like LED TVs; home appliances like washing machines; lighting products like LED bulbs and tubelights, downlighters, and CFL bulbs; and mobile phones.

Apart from the manufacturing of above products, the company also provides solutions in reverse logistics i.e. repair and refurbishment services of set top boxes, mobile phones and LED TV panels.

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Going forward, the company plans to foray into manufacturing of CCTV and digital video recorders. To expand its geographical reach, the company is aiming to grow its exports and increase its presence in South India through the new unit in Tirupati.

The strategy of the company is to improve its value add in the manufacturing process by focusing on the higher margin Original Design Manufacturer (ODM) business, which currently forms around 22% of the total revenues.

To know more about the company, you can read our IPO note on Dixon Technologies Ltd.

Speaking of IPOs, the IPO of ICICI Lombard General Insurance Company is open for subscription. The public offer of the general insurance company will remain open until 19 September 2017.

ICICI Lombard is among the first life insurance companies to commence operation in 2002 and is the market leader among private sector players.

But is the IPO worth considering? Does the company have strong fundamentals? What about valuations and growth potential? Equitymaster Insider Ankit Shah has the answers.

To know more, get on the Insider list now.

Apart from the above, other general insurance companies such as General Insurance Corp of India and New India Assurance Company are also planning to come up with their IPOs.

Various estimates put India's insurance market size at US$100 billion. The same could become a dominant theme for Indian stock markets in the years to come.

This is because the penetration levels for general insurance is very low in India as compares to other countries. As per Crisil Research, the non-life penetration in India is among the lowest with premium income forming 0.8% of the GDP in 2016. This is evident in the chart below:

Non-Life Insurance Penetration in India is Woefully Low

The rate is quite low as compared to the global average of 2.8%. In fact, India lags behind China and Brazil, each having non-life insurance penetration of 1.8%. As per Swiss Re, India is the fifteenth largest market in the world and fourth largest market in Asia.

Going by the above data, it can be said that there remains huge growth potential for non-life insurance businesses. As we also wrote in a recent edition of The 5 Minute WrapUp...

  • The non-life insurance sector in India is valued at Rs 1.28 trillion and has been growing at a compounded annual growth rate of 17.4% in the last 16 years. Demand drivers such as rapid urbanisation, rising disposable income, increasing risk awareness emergence of new risks such as cyber frauds and regulatory focus on improving insurance coverage are expected to accelerate growth ahead.

Therefore, it hardly comes as a surprise that the insurance industry is actively seeking to capitalise on the current IPO frenzy.

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Mar 22, 2018 (Close)