(Disclosure:I am market making in the shares of ICICI Pru Life)
The Insurance Regulatory and Development Authority of India (Irdai) will make it mandatory for large life insurance companies to list within a specific period. So far, none of them, barring one, has shown interest in going to public, even after completing 10 years of operations.
According to sources familiar with the developments, private-sector life insurance companies with assets under management (AUMs) of more than Rs 60,000 crore will be the first ones that will have to list. The three largest insurance companies at present are SBI Life Insurance, ICICI Prudential Life Insurance and HDFC Life. Only HDFC Life has so far shown any inclination to list.
As on March 31, 2015, SBI Life had a total AUM of Rs 71,339 crore, HDFC Life had Rs 67,000 crore, and ICICI Prudential Life had Rs 1,00,183 crore.
According to Irdai norms, a company has to be in the insurance business for 10 years to be eligible to list on the equity market. The regulator considers the financial performance, capital structure after offer and solvency margin, among other factors, to give its approval.
Regulatory officials said this was an enabling provision and they would use it if required. “For life insurers with huge operations, we do not want one or two partners to share the risks and returns. It should be listed so that the capital could be shared with shareholders,” an official said.-from BS
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Linkfest: September 14,2015
Some stuff I am reading today morning:
National Highways to grow by 50,000 km in 6 months (ET)
Govt firm on labour reforms (Mint)
Team Lease files IPO papers (BS)
Case Study: Building Wealth via SIP in Mutual Funds (SI)
Which debt mutual funds to invest in (Vipul)
10 Best Small Business Ideas with Low Investment (MyInvestmentIdeas)
6 Lessons from David Tepper (Frank)
12 Things I’ve learned from Charlie Munger about risk (25IQ)
Is this the start of India’s gold confiscation? (Zero Hedge)
A brief rant about historic valuation (TRB)