The insurance regulator may have decided to announce guidelines for equity issues by life insurance companies early next month, but companies which are not yet 10 years old will not be able to approach primary markets.
However, companies that are in existence for 10 years, but have not registered net profits for the past three consecutive years, will be able to do so through the book-building process, Irda chairman J Hari Narayan told ET.
Companies like Reliance Life Insurance and HDFC Life Insurance have expressed their intention of approaching the primary markets for raising additional funds.Given the 10-year stipulation for IPO, Reliance Life will have to wait for another year.
Reliance Life had approached the finance ministry some two years ago for allowing it to raise funds from primary markets . It wanted the ministry’s permission to skip the 10-year stipulation. Irda, it seems, is not too comfortable with the idea.
Technically, insurers will be able to approach the markets once the guidelines for equity issues by life insurance companies are out. “We hope to provide the guidelines in the next 2-3 weeks,” said Mr Narayan .