4 PSU General Insurance Companies to come out with IPO

New India, National, Oriental & United all the 4 PSU General Insurance Companies will be coming out with IPO. Even though some newspapers have written that this is because Government of India is facing financial deficit.

Let us look at the positive aspects of this move of the government;

1. IPO by these strong Insurance Companies will set a healthy record for listing of Insurance Companies in India. It means putting the insurance companies shares on right path i.e. growth 2 or 3 IPO's by Private companies at high premium and then going down on listing or within 2 months of listing would have been disaster.

2. Independent Directors are a requirement of SEBI for listing on Stock Exchange. It means that all the insurance Companies will now become broad based and will start following the rules /concepts of Corporate Governance. It is good for all of us, who are the customers of these Insurance Companies.If you feel that you should be considered for appointment of Independent Director ,this is the time to lobby for it.

3. Listing on Stock Exchange means that name of the company is covered many a times in press/TV so insurance Companies will not have too waste their money on advertising as brand is coming in front of customers on regular basis.

But here is a word of caution. The shares of these companies should not go into the hands of foreign companies because these companies (4 PSU’s) are very valuable because of

1 Real Estate assets( offices/Mumbai Flats owned by New India -thees are worth many many thousands of crores) owned by them. Pvt. Companies are generally operating out of rented buildings.

2. They own valuable investments in stock, accumulated over 40 years.

These shares should go to Indian Citizens who have been the customers of these companies. Therefore I feel;

'Let us write to Finance Minister that 10 % of the equity is reserved for policy holders of the company. We who have been loyal to these 4 companies can get the benefit of appreciation in share price. If you agree make it a point to send a letter to Finance Minister. Let us have this as a campaign.