The shares of one of the leading private general insurance companies in India are in red after it received a show cause notice from Joint Commissioner, CGST & CX Thane Commissionerate to pay a GST of Rs. 1,728.61 Crores.
In the day’s trade, the shares of ICICI Lombard General Insurance Limited closed at Rs. 1,425, down 0.84 percent from its previous day’s close price of Rs. 1,437 and its market capitalization is Rs. 69,814 Crores.
On December 27, 2023, ICICI Lombard received a Show cause notice confirming a GST demand of Rs. 1,728.61 Crores and levying a penalty of Rs. 172.88 Crores on it. The said GST order and penalty would be appropriately assessed for disclosure as Contingent Liability in the Financial Statements of the Company.
The violation as per the notice is Non-payment of GST on the coinsurance premium received as a follower in case of co-insurance transactions. The said matter is an industry-wide issue.
Non-payment of GST on re-insurance commission deducted from the reinsurance premium ceded to various Indian and Foreign reinsurers. The said matter is an industry-wide issue.
ICICI Lombard General Insurance is one of the leading private general insurance companies in India. It offers a comprehensive and well-diversified range of products and services for risk management and others through multiple distribution channels.
The company’s revenue from operations grew 11.54 percent from Rs. 16,026 Crores in FY22 to Rs. 17,876 Crores in FY23, accompanied by increasing profits of Rs. 1,271 Crores to Rs. 1,729 Crores.
It has reported a return on equity (ROE) of 17.6 percent and a return on capital employed (ROCE) of 21.2 percent, it is making good returns on its equity and capital employed.
According to the latest shareholding data available for the September 2023 quarter, the company’s Promoters hold a 48 percent stake, the Domestic Institutional Investors hold 18.52 percent and the Foreign Institutional Investors (FII) hold 22.37 percent.
Written by: Bharath K.S
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