Insurance cos IPOs likely before March 2011: CARE

MUMBAI: Leading rating agency, CARE, on Friday said that life insurance companies instead of general insurers would hit the capital markets earlier and that the market would witness a number of insurance IPOs before March 31 next.

CARE, the agency which grades IPOs based on companies' fundamentals, said insurance IPOs would be better than expected as the sector has a tremendous potential though it went through a bad phase during the Sebi-IRDA tussle over the sale of unit-linked insurance plans.

"Life insurers would be the first to hit the capital markets instead of general insurance companies. We can see some IPOs happening before March 31 next. This is a very good time for the insurance companies," CARE Ratings' Deputy Managing Director, Rajesh Mokashi, said.

While there are around 22 life insurance companies functioning in India, about 4-5 will be among the first to list on the bourses. Of the 4-5, Reliance Life Insurance is more likely to go for an IPO followed by ICICI Prudential and HDFC Life Insurance, analysts said.

Asked about the impact of the upcoming IPO norms for the insurance sector, Mokashi said, "the new IPO norms are expected soon. However, we do not expect the IPO guidelines to be an hindrance and some level of dilution will be necessary from the promoters to comply with the minimum public holding for the purpose of an IPO."