In less than three weeks, three insurance
firms, including HDFC
Standard Life, have filed draft papers for IPOs
that together are estimated to be worth nearly Rs 20,000 crore.
With the IPO market bustling with activity, two government-owned entities -- New India
Assurance and General Insurance
Corporation of India
(GIC Re) -- have joined the bandwagon this month.
The public-sector insurers are expected to hit the market in the current financial year to help the government
meet its ambitious disinvestment target of Rs 72,500 crore.
Amid persisting bullish market sentiments, despite intermittent volatility, around two dozen companies have filed preliminary papers for Initial Public Offers (IPOs) with regulator Sebi
so far this year.
Going by current trends, the IPO segment is expected to see better performance in 2017 compared to last year, when 26 companies collectively mopped up more than Rs 26,000 crore -- making 2016 the best in six years.
Standard Life Insurance
is the latest company to join the IPO league and submitted draft IPO papers on August 18.
The share sale is expected to be worth around Rs 7,500 crore, as per market sources.
Standard Life Insurance's IPO comprises an offer for sale of over 29.98 crore equity shares or 14.97 per cent stake. This includes sale of 9.55 per cent stake by HDFC
Ltd and 5.42 per cent holding by Standard Life Mauritius.
Through New India
Assurance's IPO, the government
plans to sell 9.6 crore shares, besides the fresh issue of 2.4 crore shares. It filed the draft prospectus with Sebi
on August 8.
The offer is expected to fetch more than Rs 6,500 crore, sources said.
In the case of GIC Re, the offer includes sale of 10.7 crore shares by the government
apart from fresh issue of 1.7 crore shares. It filed IPO papers with Sebi
on August 7.
According to sources, GIC Re's IPO is also expected to mop up an amount similar to that of New India
Put together, the IPOs
of the two insurance
firms and one reinsurance company are estimated to fetch nearly Rs 20,000 crore.
Last month, SBI Life Insurance
Company and ICICI Lombard General Insurance
Company had approached the Securities and Exchange Board of India
(Sebi) with their respective IPO papers.
In 2016, ICICI Prudential Life Insurance
became the country's first listed insurer after its Rs 6,000 crore public issue.
By taking the IPO route, the companies expect to achieve benefits of listing as well as enhance their brand name and provide liquidity to the existing shareholders.
According to market experts, proactive regulatory environment coupled with a general uplift in investors' sentiment has given a fillip to the domestic IPO market.
Market watchdog Sebi
has taken numerous steps that are encouraging companies to sell shares. One key enabler was making Asba (Application Supported by Blocked Amount) mandatory for all investors, including retail.
Market analysts feel that attractively priced IPOs
would receive a solid response from investors as chances of getting listed with higher premiums are more.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)