Listing daytime still away for insurers

Insurance companies will have to wait for some more time before listing, despite SEBI clearing disclosure rules, as the final guidelines from IRDA have not come and the Insurance Bill has not been passed.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.