Listing of state
general insurers may be staggered
Here is why
Two to be listed in FY18, others insurers' IPO to be done in subsequent
financial years
The public listing of five non-life general insurance companies will
most likely be spaced out. New India Assurance and General Insurance
Corporation of India (GIC Re) will probably be hitting the capital
markets in FY18 while others will be listed in subsequent years.
Last month, the Cabinet gave its nod to list five non-life general
insurance companies as part of government's move to reduce its stake to
75 percent from 100 percent in the insurers.
Oriental Insurance Company, National Insurance Company, New India
Assurance, United India Insurance and national reinsurer General
Insurance Corporation of India, or GIC Re are the five insurers who will
be listing.
“The aim is to complete the process of listing of at least two players
by March 2018. Solvency and underwriting performance are the top
criteria,” said a senior ministry official.
The reasoning behind this more staggered listing process is to give investors enough time between each initial offer.
The chairman of a public sector general insurance company on road to
listing explained that it will not be wise to get all the PSU non-life
insurers listed at the same time.
The timeline of
the IPO will also be given by the government and once appointed, the
bankers will take the deal forward.
After bankers begin the process of valuation and take a decision on how
much divestment of stake will be done, the respective boards of the
insurers will meet to give their approval to the structure. Following
this, the insurance companies will need to take an approval from
regulatory bodies like Insurance Regulatory and Development Authority of
India (IRDAI) and Securities and Exchange Board of India (Sebi).
Post this, a draft red herring prospectus (DRHP) will be filed with Sebi
for approval. Once this final approval is secured, roadshows will begin
to gauge investor appetite for the IPO.
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