Cabinet approves listing of 5 public sector general insurance companies

New Delhi: The Cabinet Committee on Economic Affairs on Wednesday gave its ‘in principle’ approval  for listing of five public sector general insurance companies in the stock exchanges.

The companies are New India Assurance, United India Insurance, Oriental Insurance, National Insurance and General Insurance.

The shareholding of these public sector general insurance companies (PSGICs) will be divested from 100 percent to 75 percent in one or more tranches over a period of time.  

During the process of disinvestment, existing rules and regulations of Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI) will be followed.

Listing on the Stock Exchange necessitates compliance with a number of disclosures and accounting requirements of SEBI, which acts as an additional oversight mechanism.  The disclosures bring about transparency and equity in the companies functioning.

Listing is expected to lead to improved corporate governance and risk management practices leading to improved efficiency.  A greater focus on growth and earnings can also be expected.
Listing will open the way for the companies to raise resources from the capital market to meet their fund requirements to expand their businesses, instead of being dependent on the government for capital infusion.