Finance Minister Nirmala Sitharaman may announce second-round capital infusion for public sector general insurance companies in the upcoming Budget to improve their financial health.
Infusion will not only improve their financial health but facilitate merger announced in the Budget 2018-19. In the Budget 2018-19 speech, then Finance Minister Arun Jaitley had announced that the three companies would be merged into a single insurance entity. However, the process of merger could not be completed due to various reasons, including poor financial health of these companies. According to the sources, after the merger, the combined entity will be listed on the bourses.
Initial estimates suggest the combined entity formed by merging the three insurers will be the largest non-life insurance company in India, valued at Rs 1.2-1.5 lakh cr. As on March 31, 2017, the three companies together had more than 200 insurance products with a total premium of Rs 41,461 cr and a market share of around 35 pc.