Good that life insurance firms go IPO

For many reasons, it is good that life insurance firms are opting for initial public offerings (IPOs). Big IPOs lead to market depth—crucial now for India because household money is finally coming to equities through institutions. It is also good for those tracking this industry because listings will encourage more public scrutiny of insurance firms through analysts covering the sector, through institutional investors such as mutual funds and pension funds, and products from this industry itself such as the unit-linked insurance plans (Ulips). It will be interesting to see which equity Ulips buy into what life insurance company stocks. Then there is the public debate that takes place around an IPO and its merits.

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SKS Microfinance: giant squid, ‘devta’ or just a business?

Expense Account, Mint

’ve written in this space before asking why my BlackBerry stayed on the grid in a remote mountain village where basic banking was missing. A few years earlier I had argued for a model that would make financial services as ubiquitous as paan masala, glucose biscuits and shampoo sachets in remote rural India. So now when this comes to pass in the form of an initial public offering (IPO) from a microfinance firm that has made capital available to hundreds of thousands of poor Indians, what’s the discomfort? The SKS Microfinance Ltd public issue opens on Wednesday for subscription. The lender is offering 16.7 million Rs10 face value equity shares in a price band of Rs850 to Rs985 apiece. And the debate has just begun in the marketplace: Is it justifiable for a firm focused on social goals to make supernormal profits?

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