New Delhi: Life insurers looking to go public can come out with an initial public offer even without the necessary profit track record, provided they rope in institutional investors for buying at least half of the shares being sold in the offer. Capital market regulator Securities and Exchange Board of India (SEBI) last week cleared the disclosure and accounting requirements for public offers by life insurance companies, but declined to relax the norms related to a mandatory profitability track record for insurers, as requested by insurance sector regulator IRDA. However, SEBI has informed the Insurance Regulatory and Development Authority (IRDA) that life insurance companies can launch public offers, subject to certain conditions, even if they do not meet the requirement of having made profits in at least three years out of the past five years. These conditions would require the insurers to launch their IPOs compulsorily through book building process, sell to the institutional investors at least 50 per cent of the shares being sold to the public and take necessary steps to ensure sufficient liquidity in stock after the offer, a senior SEBI official said. In the meeting of SEBI board last week, when the regulator cleared the IPO norms for life insurers, it looked into IRDA's request for relaxation from the the eligibility requirement related to profitability criteria, he added. IRDA had represented that insurance companies may find it difficult to comply since gestation period of life insurance business is comparatively longer, and it takes around 6 to 7 years for a life insurer to hit break even. However, it was decided by SEBI that there was no need to provide relaxation from the eligibility criteria to the life insurance companies, the official said. At the same time, SEBI suggested that the life insurance companies not meeting this criteria can still raise capital through compulsory book building process with certain conditions prescribed in the capital market regulator's (Issue of Capital and Disclosure Requirements) regulations. As per SEBI regulations, the companies need to have a track record of profitability for at least three out of the immediately preceding five years. At the same, there are provisions for the companies which do not comply with the profitability criteria. These provisions would require the life insurers without the profit track record to necessarily price their shares in the public issue through a book building process. This means, the issuer or its bankers can not decide the price on their own.