India approves listing of 5 state-owned insurers
India’s Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi has given its ‘in principle’ approval for listing five government-owned general insurers.
Set for an initial public offering are The New India Assurance Company, United India Insurance Company, Oriental Insurance Company, National Insurance Company and General Insurance Corporation of India, according to a press release.
The shareholding of these Public Sector General Insurance Companies (PSGICs) will be divested from 100 percent to 75 percent in one or more tranches over a period of time.
Among the benefits of a stock exchange listing the government mentioned an improved oversight and transparency due to a number of required disclosures and accounting requirements. The move is also expected to improve corporate governance and risk management practices, leading to improved efficiency as well as a greater focus on growth and earnings. In addition, a stock exchange listing will open the way for the companies to raise resources from the capital market to meet their funding requirements to expand their businesses, instead of being dependent on the government for capital infusion.
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