The much awaited IPO guidelines for Insurance Companies has been notified by IRDA (Insurance Regulatory Development Authority) in the Official Gazette of India.
Earlier, Insurance watchdog, IRDA has said that the intial public offer guidelines for life insurance companies will be out by June end. In October last year, market regulator Sebi had approved life insurance companies to issue IPOs.
Insurance regulator IRDA came out with guidelines allowing life insurance companies to raise funds from the public through IPOs. The insurance companies will have to take prior written approval before approaching SEBI for public issue of shares and subsequent issues thereafter. The application for the approval of the authority shall be filed in Form A as prescribed in these regulations. The validity of approval given by the authority is of one year from the date of issue of approval letter subject to following conditions:
i) Compliant with regulatory framework and disclosure requirements.
ii) Compliant with Corporate Governance guidelines.
iii) Maintenance of Solvency Margin for six preceding quarters from the quarter immediately prior to the date of filing of application.
iv) It may not be detrimental to the interests of the policyholders.
v) It may be in the interest of Insurance business in the country.
The Company will also have to file its DRHP (Draft Red Herring Prospectus) within this period with SEBI.
The Insurance Regulatory and Development Authority (IRDA), however, will decide the size of the public issue. As per the guidelines, promoters of the insurance companies will also be allowed to issue of capital under ICDR Regulations and to offload their stake in the company. The shares which are issued or through divestment must be fully paid up equity shares.
The insurance companies proposing their capital from public must be in existence for more than 10 years from the date of Commencement of business in the industry. After the insurance sector opened up in 2000, only 23 private companies have entered the life insurance business. While few companies would immediately become eligible for IPOs, the remaining would have to wait for completion of 10 years of operations.
IRDA would prescribe "the extent to which promoters shall dilute their respective holding, the maximum subscription which could be allotted to any foreign investors, lock-in period for the promoters from the date of allotment of shares and the disclosures in the Prospectus/Offer Document, in addition to such disclosure as may be prescribed by SEBI
The insurance companies, which will become eligible to come out with the initial public offerings (IPOs), include SBI Life Insurance, ICICI Prudential, Bajaj Allianz, Reliance Life etc. 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%.
Earlier, Insurance watchdog, IRDA has said that the intial public offer guidelines for life insurance companies will be out by June end. In October last year, market regulator Sebi had approved life insurance companies to issue IPOs.
Insurance regulator IRDA came out with guidelines allowing life insurance companies to raise funds from the public through IPOs. The insurance companies will have to take prior written approval before approaching SEBI for public issue of shares and subsequent issues thereafter. The application for the approval of the authority shall be filed in Form A as prescribed in these regulations. The validity of approval given by the authority is of one year from the date of issue of approval letter subject to following conditions:
i) Compliant with regulatory framework and disclosure requirements.
ii) Compliant with Corporate Governance guidelines.
iii) Maintenance of Solvency Margin for six preceding quarters from the quarter immediately prior to the date of filing of application.
iv) It may not be detrimental to the interests of the policyholders.
v) It may be in the interest of Insurance business in the country.
The Company will also have to file its DRHP (Draft Red Herring Prospectus) within this period with SEBI.
The Insurance Regulatory and Development Authority (IRDA), however, will decide the size of the public issue. As per the guidelines, promoters of the insurance companies will also be allowed to issue of capital under ICDR Regulations and to offload their stake in the company. The shares which are issued or through divestment must be fully paid up equity shares.
The insurance companies proposing their capital from public must be in existence for more than 10 years from the date of Commencement of business in the industry. After the insurance sector opened up in 2000, only 23 private companies have entered the life insurance business. While few companies would immediately become eligible for IPOs, the remaining would have to wait for completion of 10 years of operations.
IRDA would prescribe "the extent to which promoters shall dilute their respective holding, the maximum subscription which could be allotted to any foreign investors, lock-in period for the promoters from the date of allotment of shares and the disclosures in the Prospectus/Offer Document, in addition to such disclosure as may be prescribed by SEBI
The insurance companies, which will become eligible to come out with the initial public offerings (IPOs), include SBI Life Insurance, ICICI Prudential, Bajaj Allianz, Reliance Life etc. 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%.
