The Union cabinet on Wednesday approved a plan to list five public sector general insurance companies through a combination of fresh issuance of shares or offer for sale and reduce the government’s stake in them.
Finance minister Arun Jaitley said at a press conference that the exercise will be taken up in tranches.
“With the public listing in more than one tranche under SEBI and IRDA guidelines, the government holding is to be brought down to 75%,” Jaitley said. “Now, the companies will proceed as per regulations,” he added.
Jaitley had announced that the government would list the general insurance companies in last year’s budget.
The four government general insurance companies - New India Assurance, Oriental Insurance Co Ltd, National Insurance Company Ltd and United India Insurance Co Ltd - besides re-insurance firm General Insurance Corporation of India will now be able to hit the market.
The move will ensure higher levels of transparency and accountability besides providing an elbow room to the companies to carry out their expansion plans.
The total business of all the four general insurance companies is expected to touch over Rs 1 lakh crore by 2020 while it was Rs 42,000 crore in 2013-14.