IPO guidelines to be ready by Oct: Irda chief

The Insurance Regulatory and Development Authority (Irda) today said the initial public float guidelines for the industry will be ready by early October.

"The IPO (initial public offering) 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," Irda Chairman J Hari Narayan told newsmen on the sidelines of an insurance summit organised by industry chamber Assocham here today.

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 operation.

Under the Insurance Act, promoters having a 26 per cent stake can offload their equity after 10 years of operation.

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, Irda had finalised the IPO norms and had sent them to capital markets regulator Sebi for clearance. Following this, the two regulators jointly formed a panel to vet and finalise the IPO norms.

Irda had already notified the disclosure norms necessary for providing details about operations and balance-sheets on a quarterly and yearly basis. The IPO guidelines will deal with the minimum norms that an insurer must fulfill before hitting the primary markets.

The private players are waiting to tap the primary markets to augment their resource base, as all of them are yet to break even.