New India Assurance and General Insurance Corporation have obtained approval from their respective boards for listing of their shares in an initial public offering (IPO). With the companies looking at selling around 10-15% of their equity, the government could raise close to Rs 10,000 crore from the sale of shares.
“Our board has already approved listing of the shares and we have sent our proposal to the government for approval,” said G Srinivasan, chairman, New India Assurance. He said that he expected the company to go for a listing within six months of the government’s approval. Although listing of these two public sector insurance was part of the budget announcement, typically PSU divestment is cleared by the cabinet.
New India has not yet gone for a valuation. But insiders feel it should be close to Rs 50,000 crore. There are no listed insurance companies. However, recent M&A activity provides an idea of the valuation of general insurers.