State insurers keen to lap up IPCL, IBP & CMC flotations

Life Insurance Corporation of India (LIC) and General Insurance Corporation and its four subsidiaries have found the floor price of the IPCL, CMC and IBP public issues attractive enough to participate.

They are also likely to bid for the issues jointly. The domestic financial institutions had missed the bus last time during Maruti Udyog's initial public offering.

R N Bharadwaj, managing director in charge of investments at LIC, said, "We have decided to participate in the three issues. LIC is yet to take a decision on the price at which to participate. We will take a decision in a couple of days."

Bharadwaj said LIC has been a net seller in the equity market for quite some time, and it had enough funds to participate in these three issues in a large scale.

The quantum will also have to be decided in due course. Nevertheless, by participating in these issues we will be able to invest, thus, making use of surplus fund for investment in equities.

"The investment in three issues will be out of the investible surplus stipulated for the year," Bharadwaj said.

Managing director of GIC, P B Ramanujam, said the reinsurance major had taken a decision in favour of participation in all the three issues. Ramanujam said his company is likely to take a joint decision with regards to the pricing along with LIC.

Sources close to the development said four public sector non-life insurance companies were likely to participate in all the three issues. Unit Trust of India, however, is yet to take a decision.

The chairman of LIC, S B Mathur, had earlier told Business Standard, that the public sector FIs will take a joint decision on whether to participate in the issues.

"The decision of participation will depend on the pricing of these issues and will obviously have to be decided on a case to case basis," Mathur had said.

LIC holds around 3.86 per cent in CMC. GIC, New India Assurance and Oriental Insurance held 2 per cent, 2.13 per cent and 1.22 per cent respectively in CMC.

UTI holds around 4.11 per cent in IBP while banks along with FIs hold another 6 per cent at present. The government at present holds 26 per cent stake each in IBP Ltd, and CMC. It holding in IPCL is 33.95 per cent.