NEW DELHI: The govt is exploring the choice of acquisition a number of the 3 public sector general insurance coverage firms as part of a consolidation workout, and a last call will probably be taken by the new govt, sources mentioned on Tuesday.
So a ways, the NDA had talked about mergers within the state-run insurance coverage company house because it plotted a technique to toughen the monetary health of those firms and lift much-needed assets for the federal government.
The division of investment and public asset control (Dipam) met on Tuesday to discuss the method for the three public sector general insurance coverage firms. “Various options were mentioned. Whether it's going to be acquisition or merger — the decision will probably be taken by the new Cabinet,” mentioned an legitimate acutely aware of the developments.
If the federal government opts for acquisition by the financially strongest company a number of the 3, it will be the 3rd such instance after acquisition of HPCL by ONGC, the country’s biggest oil and fuel producer, in conjunction with state-run Power Finance Corporation’s (PFC’s) acquisition of Rural Electrification Corporation (REC).
An acquisition of government shares within the different two entities will even assist the Centre lift some budget and bolster its disinvestment corpus.
Finance minister Arun Jaitley in his 2018-19 budget speech had mentioned that 3 public sector general insurance coverage firms — National Insurance, United India Insurance and Oriental Insurance — would be merged right into a unmarried entity and due to this fact indexed. The plan used to be part of the federal government’s overall process of consolidation within the public enterprises house.
Last yr, Dipam had requested the dep. of economic services and products to get the problem of merger of the three firms examined and get ready a recent street map as there used to be a view that speeding into a call would not be prudent.
Latest results show that National Insurance reported a loss of over Rs 2,000 crore. Among the rest two, Oriental Insurance’s benefit used to be upper than United India Insurance’s in 2017-18. But the monetary health of the insurance coverage firms has been a matter of concern, triggering talks of recapitalisation.
The govt is raring to wrap up transaction involving the three firms within the current fiscal yr. Officials at Dipam are having a look at a timeline of October for finishing the transaction.
So a ways, the NDA had talked about mergers within the state-run insurance coverage company house because it plotted a technique to toughen the monetary health of those firms and lift much-needed assets for the federal government.
The division of investment and public asset control (Dipam) met on Tuesday to discuss the method for the three public sector general insurance coverage firms. “Various options were mentioned. Whether it's going to be acquisition or merger — the decision will probably be taken by the new Cabinet,” mentioned an legitimate acutely aware of the developments.
If the federal government opts for acquisition by the financially strongest company a number of the 3, it will be the 3rd such instance after acquisition of HPCL by ONGC, the country’s biggest oil and fuel producer, in conjunction with state-run Power Finance Corporation’s (PFC’s) acquisition of Rural Electrification Corporation (REC).
An acquisition of government shares within the different two entities will even assist the Centre lift some budget and bolster its disinvestment corpus.
Finance minister Arun Jaitley in his 2018-19 budget speech had mentioned that 3 public sector general insurance coverage firms — National Insurance, United India Insurance and Oriental Insurance — would be merged right into a unmarried entity and due to this fact indexed. The plan used to be part of the federal government’s overall process of consolidation within the public enterprises house.
Last yr, Dipam had requested the dep. of economic services and products to get the problem of merger of the three firms examined and get ready a recent street map as there used to be a view that speeding into a call would not be prudent.
Latest results show that National Insurance reported a loss of over Rs 2,000 crore. Among the rest two, Oriental Insurance’s benefit used to be upper than United India Insurance’s in 2017-18. But the monetary health of the insurance coverage firms has been a matter of concern, triggering talks of recapitalisation.
The govt is raring to wrap up transaction involving the three firms within the current fiscal yr. Officials at Dipam are having a look at a timeline of October for finishing the transaction.
Govt may use acquisition route for general insurers
![Govt may use acquisition route for general insurers]()
Reviewed by Kailash
on
May 30, 2019
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