NEW DELHI: New India Assurance Company (NIA), India's largest general insurance company in terms of net worth , domestic gross direct premium, profit after tax and number of branches, has hit the primary market with its Rs 9,600 crore initial public offering ( IPO ) on Wednesday.The insurer seeks to sell 12 crore shares in a price band of Rs 770-800 per share. This includes an offer for sale (OFS) of 9.6 crore shares by the government and a fresh issue of 2.4 crore shares. Retail individual investors (RIIs) and qualified employees will get a price discount of Rs 30 per share each.Analysts are largely neutral on the issue with a slight negative bias. Angel Broking has neutral rating, Centrum Broking has avoid rating, while Geojit Financial Services has subscribe rating on the issue. ICICI Securities says the issue is only for long-term investors, while Choice Broking has advised investors to "Subscribe with Caution”.Low return ratio and operating losses are seen as soar points, while lowest expense ratio among the top 10 multi-product insurers and robust solvency ratio at 2.27 against IRDAI's prescribed level of 1.5 is seen some positives.The insurer is leader in almost all of its product portfolio covers fire, marine, health, and motor, among others. The company had 2,452 offices and 68,389 individual insurance agents in India in June 2017, while it has overseas operations in 28 countries that contributed 14.2 per cent its total gross written premium (GWP) in FY17. It's distribution network in India included 68,389 individual agents and bancassurance arrangements with 25 banks in India.As far as listed peers are concerned, the insurer had a lower operating expense ratio of 20.4 per cent in FY17 than ICICI Lombard's 30.1 per cent. But, the insurer's return on equity (RoE) at 6.8 per cent was much lower than ICICI Lombard's 17.2 per cent. NIA had an investment book worth Rs 55,028 crore as of June 30, on which company has been able to generate yield of 8.1 per cent for FY2017.At the upper price band of Rs 800 the issue is offered at 5 times FY2017 book value and 76 times its FY2017 EPS."Its listed peer ICICI Lombard is trading at 8 times FY2017 book value and 48 times FY2017 EPS. ICICI Lombard reported decent ROE of 17 per cent and average ROE for last 5 years is 19 epr cent, while NIA reported subdued ROE of 7 per cent for FY2017 and average ROE of 9 per cent. NIA’s combined ratio is consistently higher than 115 per cent, which is impacting the profitability of the company. Considering the subdued ROE, inconsistent PAT and higher combined ratio, we recommend neutral rating on the issue,” Jaikishan J Parmar of Angel Broking said.Centrum Broking in another note said the issue appears expensive, considering a very low return ratio of mere 6.8 per cent RoE, operating loss of Rs 901 crore and declining net profit."In comparison, private players in the general insurance space have better growth rates and RoEs of close to 20 per cent. While the company holds leadership position, it is difficult to justify its valuation due to weak fundamentals. Hence, we recommend investors to 'Avoid' this issue."However, not all brokerages are neutral to negative on the issue.Geojit Financial Services noted that NIA has been making operating loss in the past few years due to higher outgo on account of wage revision and claims in health and motor segments."However, in Q1FY18, NIA has posted a PAT of Rs 513 crore, up 144 per cent YoY on annualised basis, backed by better product mix and revision in health and motor premiums. The company enjoys a strong capital position with a solvency ratio of 2.22 times as of FY17 compared to the IRDAI specified control level of 1.5 times. We believe the issue is reasonably priced considering its robust financial position, pan-India reach and bright growth prospect of the overall general insurance sector in the future," the brokerage said.Being slightly expensive with high combined ratios, we believe one should subscribe only from a longer term view and not for the purpose of accruing listing gains, ICICI Securities said in another note.