India poised for IPO record

mumbai — Indian initial public offerings are headed for a record year, as a rush of insurers seek to ride a rally in the local market and tap increasing investor demand for financial assets.

At least four Indian insurers are aiming to price stock offerings by the end of 2017, according to people familiar with the matter. Total fundraising from first-time share sales in the country could rise to 500 billion rupees ($7.8 billion) this year, Ajay Saraf, head of investment banking at India’s No. 1 IPO underwriter ICICI Securities Ltd, said in an interview. That would represent about an 85 per cent increase from 2016 and surpass the record tally of 363 billion rupees set in 2010, data compiled by Bloomberg show. HDFC Standard Life Insurance Co is planning to seek as much as 100 billion rupees in an IPO, while a potential offering from SBI Life Insurance Co. could total about 85 billion rupees, the people said, asking not to be identified because the information is private.

Firms are seeking to take advantage of a surging Indian equity market where there is a dearth of insurance stocks for investors looking to diversify their holdings in the financial industry. The offerings follow the Indian parliament’s 2015 vote to increase the amount foreign investors can own in the nation’s insurers to 49 per cent from 26 per cent.

“Everyone is in a rush to tap the market before the froth starts settling,” Rethish Varma, a Bengalurubased researcher at MarketSmith India, said by phone.