IPO guidelines for insurance to be ready by Oct

The sectoral regulator Irda on Wednesday said the initial public float guidelines for the insurance industry will be ready by early October.

"The IPO guidelines will be finalised by a panel jointly set up by the Sebi and us (Irda). We expect the final guidelines to be ready by early October," Insurance Regulatory and Development Authority Chairman J Hari Narayan told newsmen on the sidelines of an insurance summit organised by industry chamber Assocham here.

He further said the guidelines, which will allow both life and non-life insurers to mop up funds from capital markets, will certainly be out before insurance companies complete 10 years of operations.

Under the Insurance Act, promoters having 26 per cent stake, could offload their equity after 10 years into operations.

Currently, most of the 22 private life insurers and 17 non-life players have foreign partners and the Insurance Act caps foreign direct investment at 26 per cent.

The Act also restricts private players from entering the capital markets before completing a decade of operations. In July the Irda had finalised the IPO norms and had sent to the capital markets regulator Sebi for clearance.

Following this, the two regulators jointly formed a panel to vet and finalise the IPO norms. It can be noted that the Irda had already notified the disclosure norms, necessary for providing details about the operations and balance-sheets on quarterly and yearly basis.

The IPO guidelines would deal with the minimum norms that an insurer must fulfil before hitting the primary markets. The private players are waiting to tap the primary markets to augment their resource base as all the private players are yet to break even.