This year is expected to be a turning point for insurance companies. Earlier this year, the Cabinet Committee on Economic Affairs gave a go-ahead for the listing of shares of five general insurance companies - New India Assurance, United India Insurance, Oriental Insurance, National Insurance, and General Insurance Corporation of India. The government's holdings in these companies will be brought down to 75% from 100% through the offer of shares in one or more tranches.
According to sources, New India Assurance Company Ltd. is expected to sell 15% to raise as much as Rs 8,000 crore through its IPO.
Reliance General Insurance is targeting an IPO by the end of this financial year. This could give the company a valuation of Rs 6,000 crore. Fully owned by Reliance Capital, the company is planning to dilute 10% of its shareholding in 2017-18. In the next three years, to dilute 25 per cent.
ICICI Lombard General Insurance Company, a joint venture between ICICI Bank Limited and Fairfax Financial Holdings Ltd., also received a nod from ICICI Bank board for listing its IPO.
State Bank of India (SBI) too has said that its SBI Life Insurance will be listed on the Indian stock markets.
With the Insurance Regulatory and Development Authority of India (IRDAI) rejecting HDFC Life and Max Life merger, HDFC is looking at selling 10% of its stake in its life insurance arm through an IPO. Amitabh Chaudhry, MD & CEO, HDFC Life said, “We are examining the options available before us. One option is to go in for an IPO, work on which had already begun before the merger proposal came up. If we decide on an IPO, the process should be wrapped up within six months.”
After the initial public offer (IPO) of public sector banks in the last few decades, the listing of insurance players will be the next big change in the country’s financial services sector.