Govt may list just 2 insurers on exchanges this year
Only two out of the five state- owned general insurance companies are likely to be listed on the stock exchanges in the current financial year, official sources said.
The two state-owned general insurance companies, New India Assurance (NIA) and GIC Re, are gearing up to hit the capital market over the next few weeks.
The listing would be done in staggered manner for better market response, sources said.
The government had estimated to garner about Rs 11,000 crore by diluting its stake in insurance companies as part of disinvestment plans for the current fiscal.
In view of the current market condition, the government may easily get Rs 15,000 crore by diluting stake in these two companies, sources said, adding it could be upwards of Rs 15,000 crore.
Initial public offer (IPO) is part of the government's plan to list four state-owned non-life insurers and the national reinsurer. These listings would help the government meet its ambitious disinvestment target of Rs 72,500 crore for the current fiscal.
In the case of GIC Re, the government will be selling 10.75 crore shares, whereas GIC Re itself is likely to sell 1.7 crore shares through IPO. Thus, a total of 12.4 crore shares of the reinsurer would be sold through the share sale offer, constituting 14.22 per cent of the company's post issue share capital, as per the filing of the company.
The company registered a profit-after-tax of Rs 3,127 crore in 2016-17, an increase of 9.8 per cent over the previous year. The net worth of the company stood at Rs 47,983 crore.
In another listing, the government will sell 9.6 crore shares of New India Assurance while the company will issue 2.4 crore new shares through the IPO. A total of 12 crore shares of the non-life insurer would be sold through the share sale offer, constituting around 14.56 per cent of the company's post issue share capital.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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