Two general insurance and one top life insurance companies are preparing for IPO.
The government has already given a green signal to start the IPO process to two general insurance companies by asking the General Insurance Corporation (GIC Re) and New India Assurance (NIA) to appoint merchant bankers, according to media reports.
According to market sources, a top life insurance company is also preparing to launch its IPO. The company has already appointed a merchant banker for valuation. IRDA rules permit life insurance companies to launch their IPOs on completion of 10 years of operation.
While floating public issues, IRDA will hold the right to dictate the extent of dilution of stake by promoters, the maximum subscription that can be allotted to foreign investors and the minimum lock-in period for promoters after the issue. The current rules allow a maximum of 26 percent to be held by foreign investors.
The government is supposed to have a discussion with insurance industry officials on measures to boost the sector. The officials are likely to request the government to consider raising foreign direct investment limit in the insurance sector to 49 percent from 26 percent as FDI participation will help in the growth of the industry, say industry experts.