The Insurance Regulatory and Development Authority ( IRDA) already notified the final guidelines for life insurance IPOs.
But the industry response has been lukewarm and the biggest of them, SBI Life insurance which many hoped will take the lead, is in no mood either to take the plunge yet to tap the equity markets.
NDTV has learnt that SBI Life Insurance's foreign partner in the business, BNP Paribas which holds 26% in the venture first wants to have clarity on the FDI front before deciding on the equity dilution to be done by respective promoters.
The issue of raising FDI cap from the current level of 26% to 49% is stuck for the past 7 years. On the other hand, SBI, the parent company also doesn't want SBI life to get listed before having clarity on the holding structure for its conglomerate as RBI is yet to finalize the model for Banks on holding stake in their other ventures.
Meanwhile SBI life insurance also does not seem to be in great need of money after having deployed capital of Rs1000 crore. Sources say that the parent, SBI has not needed to infuse any fresh capital in the last three years and the profits generated are being ploughed back for the expansion of SBI life.
Although the 10 year criteria for Life Insurance companies will make more players eligible for an IPO ambiguity in policy and the current market situation will play a dampener for the IPO process to take off.
Other big players like ICICI Prudential, Bajaj Allianz, and HDFC life are on a wait and watch mode before taking any decision. So, while many do need capital to scale up their businesses, it may well take some time before anyone makes the first move.