National Insurance Company (NIC), gearing up for its maiden share sale either through strategic divestment or initial public offer, said it aims to meet the regulatory criteria by March 2017, reported PTI.
"Currently, we are not able to meet solvency ratio of 1.5 required for becoming eligible for IPO. Even in the first half, our ratio was at 1.26 but by March we hope to meet the same," NIC Chairman and Managing Director K Sanath Kumar said here today on the sidelines of an interactive session with the Calcutta Chamber of Commerce.
The company requires capital for future and also for meeting the solvency requirements as per IRDA guidelines, he said.
In order to improve the solvency ratio, the general insurance major has decided to shed or reduce some group businesses in health and motor segments.
Kumar said due to some asset classification criteria, NIC is unable to meet the solvency ratio.
"Real estate is not considered and equity is taken at book value. Market value of equity is Rs 17,000 crore against book value of just Rs 6,700 crore," he said.
NIC is planning to garner Rs 13,000 crore premium for the current fiscal against Rs 12,000 crore for 2015-16.
Meanwhile, Calcutta Chamber President Dinesh Jain said insurance sector offers huge opportunity as the market is expected to touch USD 350-400 billion by 2020.