In January this year, the cabinet approved listing of 5 public sector general insurance companies on stock markets through a combination of fresh issuance of shares or offer for sale. The government currently holds 100% in these 5 PSUs - New India Assurance, National Insurance, United Insurance, General Insurance Corporation and Oriental Insurance.
According to a government release, the shareholding of these companies will be divested from 100% to 75% in one or more tranches over a period of time. During the process of disinvestment, existing rules and regulations of Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI) will be followed.
New India Assurance has 2097 offices, including more than 1041 micro offices, 19,000 employees and around 50,000 tied agents; with 170 products catering to almost all segments of general insurance business. According to media reports and sources, the insurer is preparing to hit the markets in the next 6-8 months, and is expected to sell 15% through initial public offering (IPO) to raise as much as Rs 8,000 crore which includes 5% fresh equity.
However, G Srinivasan, chairman of New India Assurance, said no decision had been taken yet on the IPO.
Listing of the public sector general insurance companies is likely to yield the following benefits: necessitate compliance with a number of disclosures and accounting requirements of SEBI, which acts as an additional oversight mechanism, disclosures to bring about transparency and equity in the companies functioning, lead to improved corporate governance and risk management practices leading to improved efficiency, increased focus on growth and earnings can also be expected.
New India Assurance plans to launch IPO in the next few months
Last Updated: Jun 06, 2017 | 257 Views