Tata IA said IraDai is not eager to list foreign promoters

MUMBAI: Tata AIA Life Insurance has informed the Insurance Regulatory and Development Authority India (IRDI) that its foreign promoter, AIA group, is not ready to proceed with a public list plan as discussed with the regulator.

Tata AIA Life Insurance Company (Tata AIA) is a joint venture between Tata Sons (51%) and AIA group (49%).

“Regulator is associated with insurers to promote lists, but some companies face the resistance of foreign stakeholders due to strategic or regulatory concerns,” the regulator is involved. “In some cases such as Tata IAI Life, this is a key challenge to Irdai pressure for listings.”

A spokesman for Tata and AIA did not respond to comments requests.

Tata AI started operations in 2001. Initially it had 26% foreign stake, which increased in 2016 after the Foreign Direct Investment (FDI) cap was raised and currently owns 49% of the joint venture. AIA operates in 18 markets including India, Mainland China, Hong Kong SAR, Thailand and Singapore, with $ 286 billion on December 31, 2023.

While the list is not legally mandatory, Irdai encourages insurance companies to go public to increase transparency and corporate governance. Earlier this month, nine private insurers, including Tata AIA, HDFC Ergo, Bajaj Elianz (Life and General) and SBI General, submitted to IPO Irdai following the regulatory nuns.

Irdai will now review these plans before deciding the next step. Installed insurance companies can take at least four quarters to complete the listing process, while new players or additional approval may require six quarters or more.

The regulator was initially engaged in informal discussions before requesting the plans approved by the board to the insurers. Each case is expected to be personalized to bring more insurance companies to public markets.

Tata AI has registered a total premium revenue for FY 24, 25,692 crore, which is an increase of 23 to 25% of the financial year. As of March 31, 2024, the company’s solvency margin was 177%, which is higher than the regulatory requirement of 150%.

The company has an authorized share capital of CRORE 5,000 crore. In FY 24, Tata AI issued and allocated 980 million full paid-up equity shares through an issue of Rs 80 980 crore. As of March 31, 2024, its paid-up equity share capital was 92,933.50 crore. Based on personal weight premiums (WRP) in large private insurers, Tata AIA owns a market share of 7% by 2024.