Insurance firms are all about IPOs this year
- ICICI Prudential first insurance firm to opt IPO
- Reliance General and SBI Life got board members approval for listing
- Government to divest 25% in five state-owned general insurance arm through IPO
2017 has been a good year for initial public offers (IPO). It been nearly six months and a total of eight companies have been listed on Indian markets already. raising nearly Rs 5,000 crore.
However, it is the insurance companies that are readying to make a beeline for IPO with ICICI Prudential already listed raising over Rs 6000 crore.
At present, five state-owned and two private life and general insurance firm have announced their motive to enter the IPO market.
Reliance General Insurance (RGI), on June 12, 2017 said that its board approved the IPO. It expects the listing to complete by FY18.
State Bank of India (SBI) too has said that its SBI Life Insurance will be listed on the Indian stock markets.
In the month of May 2017, SBI said that it will initiate process for offer for sale of up to 12% of equity shares via this IPO.
Finance Minister Arun Jaitley, in January 2017, approved listing of five state-owned general insurance companies -- New India Assurance, Oriental Insurance, National Insurance, United India Insurance and national reinsurer General Insurance Company.
The government plans to earn $1.63 billion (Rs 10,500 crore approx) worth of stakes in PSU general insurance companies.
The sudden likeness for insurance companies to raise money from the primary markets began when the Insurance Regulatory and Development Authority of India (IRDA), in August 2016, allowing insurance companies with about 10-year history to get themselves listed on Indian stock exchanges.
Pranav Haldea, Managing Director of Prime Database said, "This year is seeing entry of different sectors like life insurance, general insurance, AMCs, stock exchanges and depositories which is a good indication for IPO market."
India Brand Equity Foundation (IBEF) sees life insurance industry to grow 2-2.5 times by 2020 reaching $280 billion by 2020.