Govt examining lock-in period of 5 years for insurance cos

NEW DELHI: The government on Tuesday said it is examining to allow insurance companies to list after five years of operation, instead of the current 10-year norm, Parliament was informed.

"The issue of reducing the lock-in period of insurance companies for initial public offer (IPO) is under examination in consultation with the Insurance Regulatory and Development Authority (IRDA) and other stake holders," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.

He, however, said that a final decision on this matter has not been taken yet.

Last month, IRDA had said that the initial public offer guidelines for the insurance sector is likely to come out in April.

"The IPO guidelines could take a month-time and SEBI will take the final call," IRDA chairman J Hari Narayan had said.

Several private sector insurance companies, including Reliance Life, have shown interest in tapping the capital market to augment its resource base.

As per the Insurance Act, promoters having 26 per cent stake can offload equity after 10 years of operation of the company.