Definity secures one of Canada’s largest IPOs: Is DFY stock a buy?

2 min read | November 19, 2021 04:53 AM EST | By Shreya Biswas

Definity secures one of Canada’s largest IPOs: Is DFY stock a buy? — Image source: Copyright © 2021 Kalkine Media

Definity Financial Corporation IPO

Originally known as Economical Mutual Insurance Co, Definity Financial announced the launch of its IPO on Monday, November 8, where it had said that it was looking to raise about C$ 1.25 billion.

While it sold about 63.6 million shares at its IPO, Definity said on Wednesday, November 17, that it is also selling 20.6 million shares and 11.4 million shares to Healthcare of Ontario Pension Plan and Swiss Re Investments, respectively.

Definity Financial Corporation IPO

This private placement, it said, is likely to close on November 23.

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At its IPO, the Waterloo, Ontario-based firm offered its share for a price of C$ 22 apiece, which was, as per its amended prospectus, the upper end of its planned price band of C$ 19 to C$ 22.

What about DFY stock?

The property and casualty insurance provider began trading on the Toronto Stock Exchange (TSX) on Thursday, November 18, under the ticker name of ‘DFY’.

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DFY stock opened at a value of C$ 28 apiece and shot up to the day’s high of C$ 30. At its closing price of C$ 27.17 apiece, the scrip was nearly 24 per cent above its IPO price.

Bottomline

Definity Financial Corporation, one of the top providers of casualty and property-related insurance in Canada, is said to have a market share of 4.6 per cent. Founded in 1871, the company is also one of the oldest insurers in the country.

Under its wing, it presently holds subsidiaries such as Economical Insurance, Family Insurance Solutions Inc, Petline Insurance, etc.

Definity Financial noted that it plans to use the proceeds from its IPO to finance cash benefits of its demutualization process.

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