Kolkata-based state-owned National Insurance Company (NIC) is set to launch its initial public offering (IPO) by 31 March next year, which is the end of the current fiscal year.
If approved, it would mean that NIC would be the third government-owned insurer to be listed by next March, after GIC Re and The New India Assurance, both of which have appointed bankers to handle their proposed IPOs.
"We are waiting for approvals from the government,” reported Press Trust of India citing Mr Sanath Kumar, NIC's Chairman and Managing Director.
He said that the company's preference is for the IPO to take place in the current financial year, “now that our capital position is comfortable".
NIC has posted a solvency margin of 190% above the regulatory minimum requirement of 150%, the company announced when it released yesterday its financial results for the fiscal year ended March 2017 (FY2017).
In contrast, it had reported a solvency ratio of 126% a year ago which had led the industry regulator, the IRDAI, to direct the insurer to take corrective action to improve its solvency position.
Mr Kumar attributed the current improved solvency ratio to a reduction in exposure to loss-making group health business, re-pricing of health and motor products as well as lower subordinate debt.
The company's net worth rose by 9% to INR9,544 crore (US$1,473 million) at the end of March from INR8,764 crore a year ago.
NIC's FY2017 gross premiums leapt by 18.8% to INR 14,282 crore compared to FY2016. However, net profits plunged to INR49 crore for FY2017 from INR151 crore for the previous fiscal year. Mr Kumar blamed the situation on higher provisioning for liabilities.
The combined ratio stood at 133.7%, and the underwriting loss was flat at INR3,680 crore for FY2017 against INR3,633 crore for FY2016.
In January this year, the Cabinet approved the stock listing of five state-owned general insurance companies. Apart from GIC Re, New India and NIC, the other two insurers are Oriental Insurance and United Insurance. Currently, the only listed insurer in India is ICICI Prudential Life Insurance which floated its shares last year.