As per the guidelines issued by the Insurance Regulatory and Development Authority, life insurance companies, which have been in business for over 10 years, would be eligible to come out with IPOs. Besides, the promoters of the insurance companies would be permitted to offload their stake in the company
New Delhi: The Insurance Regulatory and Development Authority (IRDA) on Thursday came out with guidelines allowing life insurance companies, which have been in business for over 10 years, to raise funds from the public through IPOs, reports PTI.
IRDA, however, will decide the size of the public issue, it said in a notification.
As per the guidelines, promoters of the insurance companies will also be allowed to offload their stake in the company.
The insurance companies, which will become eligible to come out with the initial public offerings (IPOs), include ICICI Prudential Life, HDFC Standard Life and SBI Life.
IRDA would prescribe “the extent to which promoters shall dilute their respective holding, the maximum subscription which could be allotted to any foreign investors,” said the IRDA Regulations, 2011.
IRDA, it added, would prescribe a lock-in period for the promoters to prevent them from exiting the company.
The regulations stipulate that no life insurance company should approach market regulator Securities and Exchange Board of India (SEBI) for an IPO without seeking prior approval of IRDA.
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.
Commenting on the guidelines, HDFC Standard Life MD and CEO Amitabh Chaudhry said, “It will take some time before companies actually come out with public issues. IRDA has given a lot of flexibility to the insurers in the guidelines.”
After IRDA’s approval, the applicant company would have to file the Draft Red Herring Prospectus (DRHP) for IPO with market regulator SEBI within a year, the norms said.
While granting approval, the regulator would take into consideration the company's overall financial position, its record, the capital structure post issue and reasons for fund raising.
In June, IRDA had issued draft guidelines on such listings for public comments.
No issuance and allotment of capital by an insurance company shall be, in any form other than as fully paid-up equity shares, the guidelines said.
Besides, the insurance companies are expected to have a 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.
Further, the insurance companies would have to mention in the draft prospectus the risk factors specific to the insurance companies, overview of the insurance industry, glossary of terms used in the sector and financial statements, among others.
“This is a milder version of the draft guidelines. Now a formal guideline for IPO of life companies will give more clarity,” HDFC Standard Life’s Mr Chaudhry said.
Shopkeepers in many cities took out marches demanding a rollback of the government move even as traders’ bodies said the decision will create an uneven playing field in the country which will tilt towards multi-national companies and prove to be a ‘nightmare’ for traders and consumers
New Delhi: Neighbourhood and small stores for protection of whose interest an all-India bandh against foreign direct investment (FDI) in retail was called today were by and large open while major markets responded to it with partial to complete shutdown, reports PTI.
BJP and other opposition parties have demanded a rollback on the FDI decision and the response to the bandh call in opposition-ruled Gujarat and Bihar was partial. In Delhi, Andhra Pradesh and Assam also it was partial.
‘Kirana’ and neighbourhood shops remained open in a majority of places. In Delhi, markets like Sarojini Nagar and INA disassociated from the day-long strike call, saying the protest was uncalled for.
Shopkeepers in many cities took out marches demanding a rollback of the government move even as traders’ bodies said the decision will create an uneven playing field in the country which will tilt towards multi-national companies and prove to be a ‘nightmare’ for traders and consumers.
Confederation of All India Traders' (CAIT) secretary general Praveen Khandelwal claimed traders across the country were participating in the strike.
“Around five crore traders belonging to 10,000 traders’ bodies across the country are participating in the bandh.
Traders took out marches in commercial markets across the country,” Mr Khandelwal said.
BJP also joined the strike in Delhi by organising marches and burnt effigies of prime minister Manmohan Singh and Delhi chief minister Sheila Dikshit in at least 20 locations of the city.
Small and medium traders across Maharashtra including Mumbai downed their shutters. Federation of Associations of Maharashtra (FAM), the apex body of 750 trade, transport and small-scale associations, claimed that about 35 lakh traders in the state had joined the strike.
Most shops and establishments in West Bengal downed their shutters including in the wholesale market in Posta area of Burrabazar, the largest in the state.
Ruling out any roll-back of the policy to allow foreign investment in multi-brand retail in the country, the government said it would issue the guidelines in due course.
“The rules will be framed which answer the issues raised and decisions taken in the Cabinet,” secretary of the Department of Industrial Policy and Promotion (DIPP) PK Chaudhery told reporters here.
Shops and business establishments in Tamil Nadu, Karnataka and Odisha by and large remained shut.
Many private schools remained closed in Patna as a precautionary measure. While ruling NDA in Bihar has extended support to the strike, Congress and LJP have opposed it. Chief minister Nitish Kumar has said he would not allow 51% FDI in multi-brand retail.
“We have received good response for the bandh in Mumbai and Navi Mumbai as traders of the Agriculture Produce Market Committee (APMC) have joined call to support the one-day bandh. Major markets of grain, fruits and vegetables, onion and potato and ‘kirana’ have observed bandh today," FAM president Mohan Gurnani said.
“Traders from all over the country, including Tamil Nadu, Gujarat, Kerala and other states, are strongly opposing FDI in retail. This is a question of our existence and, hence, there are no divisions,” he claimed.
Maintaining that there was no need for foreign investment in the sector, Mr Khandelwal said here, “The government should withdraw the permission of FDI in retail”.
He said Indian retail sector was being run successfully by the indigenous capital at the rate of 15% and contributing 10% of GDP. “So no FDI was required”.
“The foreign retailers can open in big cities, but they will source from mandis across rural India and small town.
With their money and power over time, they can corner the supply of produce and dominate the outsources side,” he said.
SBI NRE fixed deposit rate for 1 year to less than 2 years is revised to 3.82%.
State Bank of India (SBI) has increased interest rates on NRE Fixed Deposits by 12 to 15 basis points with effect from 1December 2011. The revised interest rate for fixed deposit from 1 year to less than 2 years is 3.82%. The revised rate for fixed deposit from 2 years to less than 3 years is 3.51%. Finally, for fixed deposits from 3 years to 5 years, the revised interest rate is 3.64%.
Attractive interest rate is available on NRE & NRO Savings account at 4.00% p.a.
Interest for all rupee savings accounts will be calculated on the daily closing balances maintained in the account.
Interest rate on FCNR (B) deposits in USD has also increased by 5 to 15 basis points for maturities 1 year and above but less than 5 years with effect from 1st Dec. 2011.
The revised interest rate chart is given below.