IPO guidelines for insurance cos soon: Irda

Insurance regulator Irda today said the guidelines for insurance companies to tap the capital market for funds were awaiting Sebi nod and would be out soon.

"IPO guidelines for insurance companies will be out soon. It has been approved by the Joint Committee of Sebi and has to be approved by the Sebi (board)," Insurance regulatory and Development Authority (Irda) Chairman J Hari Narayan told reporters here.

Last month the regulator had said that the proposed initial public offer (IPO) guidelines for non-life insurance firms were in the process of finalisation.

The guideline for IPO of life insurance companies has already been approved by SCADA, a body constituted by Sebi, and is awaiting final nod from the market regulator.

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

As per the Insurance Act, promoters having 26 per cent stake can offload equity after 10 years of operation. However, the legislation empowers the government to reduce the mandatory period.

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 will deal with norms that a company must fulfill before hitting the capital markets.

The general insurance sector has 21 players, which include four state-owned companies.

Several private sector insurers, including Reliance Life and HDFC Standard Life, have already shown interest in tapping the capital market to augment their resource base.

The private players are waiting to tap the primary markets to augment their resource base.