Cabinet gives nod to list five PSU general insurers
Government, looking to bring down its holdings in the five state-owned GICs to 75% from 100%, will be able raise resources in the next fiscal through the move
In what could generate additional resources for the government in the next fiscal, the cabinet committee of economic affairs (CCEA) on Wednesday gave its nod for the listing of the five state-owned general insurance companies (GICs) – New India Assurance Company Limited, National Insurance Company Limited, Oriental Insurance Company Ltd, United India Insurance Company Ltd and Agriculture Insurance Company Ltd.This paves the way for the government to reduce its stake in the five GICs from the current 100% to 75%, maximum stake-holding mandated by Securities Exchange and Board of India (Sebi) in a publicly listed company.Ranen Banerjee, leader public finance and economics, PwC India, said the government's decision will result in these general insurance public sector undertakings (PSUs) being operated in a more 'competitive' and 'accountable' manner."It should allow them to become more competitive so that they (PSUs) can compete better in the market (with private general insurance companies). It will also make them (PSUs) more accountable as there'll be more scrutiny (of books) and therefore, eventually they will become more efficient. It will also bring some resource to the government," he said.