Union Insurance to raise Tk19cr with IPO

The securities regulator has allowed Union Insurance to raise Tk19.36 crore with an initial public offering (IPO) by issuing 1.93 crore ordinary shares. 

The insurer will offer the shares to the public at a face value of Tk10 each, and invest the fund in fixed deposit receipts (FDRs) and in the capital market. It will use a part of the fund to purchase a floor space.

The Bangladesh Securities and Exchange Commission (BSEC) approved the IPO at a meeting on Wednesday.

Union Insurance provides insurance coverage in the areas of the property damage by fire incidents, marine cargos, motors, liabilities, and engineering projects.

The insurer had earlier applied to the commission but failed to comply with the securities rules.

Later that year, BSEC exempted insurance companies from the securities rule to enable them to get listed on the stock market under the fixed price method.

Presently, the insurance company's paid-up capital is Tk29.04 crore.   

According to the reports of the January-September period of 2020, the net profit of the company was Tk2.70 crore and its earnings per share stood at Tk0.93.

During the period, its net premium stood at Tk43.11 crore and its net claim at Tk8.68 crore.

At the same time, the net asset value per share was Tk16.02.

Union Insurance Company Ltd started its journey in Bangladesh as a public limited company in August 2000. 

As per the BSEC's decision, institutional investors with a minimum of Tk1 crore investment in stocks can subscribe to the shares of the company through an electronic subscription system.

Besides, institutional investors of recognised pension funds and provident funds with a minimum of Tk0.50 crore investment in stocks will also be able to subscribe to the shares in the same way.

There are 78 companies – 32 life insurance and 46 non-life insurance – in the insurance sector of Bangladesh.

Out of 32 life insurance firms in the country, 29 are private, two foreign, and one is nationalised.