The government may allow insurance companies to float an initial public offering after five years of operations instead of the current norm of 10 years, Insurance Regulatory Development Authority chairman J Hari Narayan said yesterday.
"At present nobody can issue an IPO because the law has not yet been changed."
Narayan said on the sidelines of an insurance summit organised by the CII in Mumbai. "The government has said 10 years, but they have the right to change that and make it different. They have not yet done so."
Currently no private insurance company is eligible to issue an IPO as none of them have completed 10 years. Three of them will become eligible under current regulations to tap the capital market sometime next year - HDFC Standard Life, Max New York Life and ICICI Prudential Life – as they were registered in 2000.
Anil Ambani's Reliance Life Insurance is particularly keen to launch an IPO next year, and has been reportedly lobbying the government to reduce the period of operations required.
The former AMP Sanmar Life, which acquired a licence towards the end of 2001, was later taken over by Reliance Capital to form Reliance Life. Under the current norms, it has nearly two years to go before it completes a decade of operations.