NSE IPO set to deliver massive gains of Rs 7,200 crore to state-run insurance firms

Mumbai: Five public sector insurance firms are set for a windfall pegged at about ₹7,200 crore from the sale of 40 million National Stock Exchange shares in the bourse's proposed IPO, according to the draft prospectus, based on an assumed valuation of ₹1,800 a share.

General Insurance Corporation of India will lead the pack, followed by New India Assurance, National Insurance, United India and Oriental Insurance. They acquired the shares for ₹6.8 crore and are poised to book hefty gains in the second quarter from the IPO.

LIC, NSE's largest shareholder with a 10.72%, is not divesting. The five insurers' combined stake - totalling 165 million shares - will fall from about 6.7% to 5.1%.


General Insurance Corp, National Insurance, New India, Oriental Insurance and United India were among the earliest investors in the exchange, which opened in 1994 and is India's biggest by trading volume. The proposed IPO, expected later this month, is entirely an offer for sale of up to 148.91 million shares, which would mean that NSE itself will not receive proceeds from the issue.

The actual sums that the insurers get will depend on the offer price, which has not yet been finalised.

Better Solvency Ratios Seen

The IPO could boost second quarter profits for the five insurers. It could also provide a capital boost to state-run general insurers seeking to strengthen weak solvency buffers. National Insurance, United India and Oriental Insurance together hold about 90 million NSE shares and will retain roughly 73 million after selling about 17 million shares. At ₹1,800 a share, their remaining holdings would be worth about ₹13,100 crore, creating scope for a mark-to-market gain once NSE is listed. Industry officials estimate the revaluation could improve solvency ratios, potentially by close to 100 basis points for some of the insurers.

As of March 2025, Oriental Insurance reported a solvency ratio of negative 1.03, followed by National Insurance at negative 0.67 and United India Insurance at negative 0.65.

LIC, which holds 265.28 million NSE shares, or 10.72% of the exchange, is not selling any and has also secured the right to nominate a director to the exchange's governing board. The DRHP also shows that insurers are permitted to hold up to 15% of NSE under stock exchange regulations, subject to prior Securities and Exchange Board of India (Sebi) approval for holdings above 5%. Their investments are also subject to Insurance Regulatory and Development Authority of India investment exposure norms.

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Other than LIC, HDFC Life holds 12.38 million shares and SBI Life 8.21 million shares, and neither is participating in the offer. ICICI Lombard will sell 2.35 million NSE shares while retaining 21.15 million shares. ICICI Lombard, which acquired its NSE stake at a weighted average cost of ₹169.49 a share, could book a gain of ₹383 crore from the sale at a ₹1,800 IPO price.