News eDaily03 May 2017

India:2 govt-run insurance giants inching closer to IPO

03 May 2017

Two of India's leading public sector insurance companies have selected merchant bankers and initiated discussions with the concerned parties to launch their initial public offers.

With New India Assurance (NIA), the country's biggest general insurer, and GIC Re, the only state-owned reinsurer, expected to sell 10-25% of the capital, the government is likely to receive around INR10,000 crore (US$1.56 billion) from the divestment, reported Indian Express.

NIA has chosen five merchant bankers to manage its IPO. The merchant bankers selected by the NIA are Nomura Financial Advisory & Securities (India), Kotak Mahindra Capital Company, Yes Securities, IDFC Bank and Axis Capital.

GIC Re has also selected five merchant bankers — Citi Group Global Markets, Axis Capital, Kotak Mahindra Capital, Deusche Equities India and HSBC Securities and Capital Markets.

Key factors of the listings, like size, pricing and timing for both the companies, are yet to be finalised.

“NIA is still talking to the government to give the final shape to its IPO. It will be a fairly large issue where the proceeds will go to both government and NIA, sources said. The likely timing of the issue will be either around October or November.

Sources in the Ministry of Finance have said that there will be a gap in launching the IPOs of NIA and GIC Re.

The other state owned general insurers, namely National Insurance, United Insurance and Oriental Insurance, need to improve their financials before planning their IPOs.

 

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