IPOTwitter: Practical Law Cap Markets

Indian stock market is bustling with activity as more and more companies are filing for Initial Public Offering (IPO) to raise money from the primary market. Three insurance firms have filed draft papers for IPOs worth around Rs 20,000 crore in less than three weeks, PTI reported.

Two state-owned insurer—New India Assurance and reinsurer General Insurance Corporation of India (GIC Re)—filed draft papers this month. New India Assurance filed draft documents with the regulator with an aim to raise Rs 7,000 crore. Another government insurance firm, GIC Re is looking to fetch Rs 6,500 crore ($1 billion) through IPO.

HDFC Standard Life Insurance is the latest company to join the IPO league and submitted draft IPO papers on August 18. The share sale is expected to be worth around Rs 7,500 crore.

One of the leading private insurance company, HDFC Standard Life Insurance's IPO comprises an offer for sale of over 29.98 crore equity shares or 14.97% the company's total stake, which includes the sale of 9.55% stake by HDFC Ltd and 5.42% holding by Standard Life Mauritius, the agency reported.

The government is planning to sell 12 crore shares through New India Assurance IPO comprising 2.4 crore new shares and an offer for sale of up to 9.6 crore shares. In the case of GIC Re, the offer includes sales of 10.7 crore shares by the government with a fresh issue of 1.7 crore shares.

Put together, the IPOs of the two insurance firms and one reinsurance company are estimated to fetch around Rs 20,000 crore, the agency reported.

So far this calendar year, around two dozen companies have filed draft papers with the regulator Securities and Exchange Board of India (Sebi), primarily because of the prevailing bullish market sentiments.

Going by current trends, the IPO segment is expected to see better performance in 2017 compared to last year when 26 companies collectively mopped up more than Rs 26,000 crore—making 2016 the best in six years.

Market experts believe attractively priced IPOs would get a good response from investors.

The central government had fixed an ambitious disinvestment target of Rs 72,500 crore in fiscal 2018 and has collected Rs 9,300 crore so far.