Insurance companies which have completed 10 years of operation would be eligible to raise money through public offer provided the firm meets other requirements
Insurance companies that have completed 10 years of operation and have strong financials will be allowed to access capital market, according the draft guidelines released by the regulator IRDA.
Those insurance companies which have completed 10 years of operation would be eligible to raise money through public offer provided the firm meets other requirements, the proposed regulation said.
The companies which have completed 10 years of operations include ICICI Prudential Life and HDFC Standard Life. Insurance sector was opened to private sector in 2000. The 10-year clause for public offer is also a part of Insurance Act, 1938.
No issuance and allotment of capital by an insurance company shall be, in any form other than as fully paid up equity shares, the proposed IRDA (Issues of Capital and Disclosure Requirements for Life Insurance Companies) Regulations, 2011 said.
Insurance firm planning public offer has to seek ‘formal approval’ from IRDA and then approach the Securities and Exchange Board of India (SEBI) for final approval from the capital market regulator.
“The Authority shall consider the applicant company’s overall financial position, the regulatory record and the proposal for issue of capital prior to giving its ‘formal approval’ to the proposal to get its shares listed on the stock markets or raise funds through an issue of capital,” it said.
As part of eligibility criteria, the insurance company should have maintained the prescribed regulatory solvency margin as at the end of the preceding six quarters, it said.
Besides, the insurance company should have embedded value of at least twice the paid up equity capital, it said, adding the insurance company should have been fully compliant with the corporate governance guidelines issued by IRDA.
“Only after obtaining the consent of the IRDA to make an application, the concerned insurance company may proceed with complying with various requirements as may be laid down by the SEBI under the ICDR Regulations, 2009,” it said.
The proposed regulation has also recommended the insertion of risk factors specific to the insurance companies and overview of the insurance industry in the offer document. Besides, the offer document should also contain glossary of terms used in the insurance sector and disclosure of financial statements.
IRDA has invited comments or suggestions from all stakeholders on the exposure draft by 30th June.
The revised rate has been applied to all the existing loans
Private sector ING Vysya Bank hiked lending rate by 25 basis points. With the increase, base rate or the minimum lending rate will be 9.70% against 9.45% earlier, ING Vysya Bank said in a statement.
The revised rate has been applied to all the existing loans which are linked to base rate with effect from 21st June. Following this new housing, auto and other loans would become costlier.
The bank has also raised the benchmark prime lending rate by 25 basis points to 18.25%.
Axis Mutual Fund new issue closes on 28th June
Axis Mutual Fund has launched Axis Fixed Term Plan-Series 14 (368 days), a close-ended income scheme.
The investment objective of the scheme is to generate returns through a portfolio of debt & money market instruments that are maturing on or before the maturity of the respective plan(s). The tenure of the scheme is 368 days.
The new issue closes on 28th June. The minimum investment amount is Rs5,000.
Crisil Short-Term Bond Fund Index is the benchmark index. Ninad Deshpande and Sivakumar are the fund managers.