India faces $7.8bn in insurance IPOs

Indian initial public offerings (IPOs) are headed for a record year, as a rush of insurers seek to ride a rally in the local market and tap increasing investor demand for financial assets, according to an Aug. 20 Bloomberg report.

At least four Indian insurers are aiming to price stock offerings by the end of 2017, according to the report. Total fundraising from first-time share sales in the country could rise to 500 billion rupees ($7.8 billion) this year, Bloomberg cited Ajay Saraf, head of investment banking at India’s No. 1 IPO underwriter ICICI Securities, in an interview.

That would represent about an 85 percent increase from 2016 and surpass the record tally of 363 billion rupees set in 2010, according to Bloomberg. HDFC Standard Life Insurance Co. is reportedly planning to seek as much as 100 billion rupees in an IPO, while a potential offering from SBI Life Insurance Co. could total about 85 billion rupees. State-owned reinsurer General Insurance Corp of India (GIC Re) on Aug. 7 filed for an initial public offering (IPO) to be listed on the Bombay Stock Exchange and the National Stock Exchange of India. The transaction could raise more than $1 billion according to bankers, Reuters reported on the same day.

Firms are seeking to take advantage of a surging Indian equity market where there is a dearth of insurance stocks for investors looking to diversify their holdings in the financial industry. The offerings follow the Indian parliament’s 2015 vote to increase the amount foreign investors can own in the nation’s insurers to 49 percent from 26 percent.

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