Cabinet to list 5 state-run insurance cos: FM Jaitley

Last year while announcing the Annual Budget, Jaitley had said that the government will list the state-run GICs to improve transparency and accountability.

Cabinet to list 5 state-run insurance cos: FM Jaitley
Arun Jaitley said that the government to cut its holding in PSGICs to 75%. Photo: Finance Ministry
By ZeeBiz WebTeam
Updated: Wed, Jan 18, 2017
03:22 pm
Mumbai, ZeeBiz WebDesk
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Finance Minister Arun Jaitley on Wednesday said that the government is planning to cut its holding in all the five state-run General Insurance Companies (GICs) to 75% from 100% through offer of shares in one or more tranches.

Jaitley said that the cabinet has approved the listing of five public sector general insurance companies. The five companies are  New India Assurance ,United India Insurance, Oriental Insurance, National Insurance & General Insurance.

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, Ministry of Finance said in a release. 

As per the release, listing of Public Sector General Insurance Companies (PSGICs) is likely to yield the following benefits: 

  • Listing on the Stock Exchange necessitates compliance with a number of disclosures and accounting requirements of SEBI, which acts as an additional oversight mechanism.  The disclosures bring about transparency and equity in the companies functioning.
  • Listing is expected to lead to improved corporate governance and risk management practices leading to improved efficiency.  A greater focus on growth and earnings can also be expected.
  • Listing will open the way for the companies to raise resources from the capital market to meet their fund requirements to expand their businesses, instead of being dependent on the Government for capital infusion.

Frank Noronha, Principal Director General of Press Information Bureau, in his tweet said, "Listing will open way for the companies to raise resources from the capital market to meet their fund requirements."

Last year while announcing the Annual Budget, Jaitley had said that the government will list the state-run GICs to improve transparency and accountability.