Insurers Upbeat On Investment In IPOs (24-Jan-2010)
Domestic companies want to tap the enthusiasm in the equity market to raise funds, due to a sharp revival in the stock market.
But, however, there are concerns if there will be enough takers for this rush whereas these concerns could be assuaged, with insurance companies positive about investing in the IPO space.
The stock markets have bounced sharply along with the confidence of India''s leading companies, where among them, 50 have already filed a draft prospectus for a public offer with the market regulator.
Moreover, it is said that the markets could see around Rs 67,500 crore of inflows from insurance sector that could assist concerns that the huge supply of fresh paper may not find enough takers.
Meanwhile, Life Insurance Corporation (LIC) seeks to invest Rs 12000 crore to Rs 15000 crore in equities between January and March and has already deployed Rs 38,000 crore this year.
Most of LIC pool is expected to go into PSUs offering subscription lined up for February of which the important ones include NTPC, NMDC and REC.
Meanwhile, the insurance industry is preparing estimates for their equity investments and it has set aside a major chunk for the coming quarter, even as the equity markets get set for the flood of issuances in the pipeline.
On the other hand, the insurance sector will be a major investor in the upcoming IPOs and FPOs.
Whereas, the fund raising spree is likely to continue for the whole of this calendar year with estimates showing that companies could be looking to raise over Rs 50,000 crore over 2010.
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