The initial public offer guidelines for the insurance sector is likely to announced next month, the Insurance Regulatory & Development Authority (Irda) said on Monday. “The guidelines could take a month time and Sebi will take the final call,” Irda chairman J Harinarayan said.

He further said the valuation norms for the company has been finalised and sent to the Institute of Actuaries. “Once their (Institute of Actuaries) committee clears it, it will be sent to Sebi and then the market regulator would take a call,” he added.

Irda, which has been working on the guidelines along with the market regulator Securities and Exchange Board of India (SEBI), is likely to come out with a draft for public comments before issuing the final norms.

Several private sector insurance companies, including Reliance Life, have shown interest in tapping the capital market to augment its resource base.

The government had proposed to ease the norms to allow companies to list after five years of operation, instead of the current 10-year practice.

As per the Insurance Act, promoters having 26% stake can offload equity after 10 years of operation of the company. The legislation also 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 minimum norms that a company must fulfill before hitting the capital market.

Norms for correct valuation, disclosure of operating results and profit and loss account and filing of the Draft Red Herring Prospectus (DRHP) are the three essentials that a company have to fulfill when going for public offer.

Besides state-owned Life Insurance Corporation, 22 private companies are offering life insurance policies. The general insurance sector has 21 players, including four state-owned companies.

Anil Ambani Group’s life insurance venture Reliance Life expects to tap the capital market with its initial public offer in the first quarter of next fiscal.

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June 2021