GIC, which has been preparing itself for the issue for more than two years now, has all along waited for the capital market in Singapore to perk up so that issue could be priced at a premium.

The GIC board decided, at a recent meeting, to postpone the issue for the time being at the instance of insurance secretary BK Chaturvedi, even though all the formalities had been completed. ``We have decided to defer the issue indefinitely,'' an official said. The GIC board, in fact, plans to re-examine the decision to go public.

``Certain fundamental aspects of the event like validity of allowing foreigners to have stakes in the company and the need for capital required will be discussed in detail,'' the official said. If necessary, GIC will provideadditional capital to the subsidiary, he said. The company's plan to go in for a bonus issue has also been put on hold.

Had the issue hit the market, India International would have been the first domestic company to have gone public in foreign soil.GIC and its four subsidiaries had planned to go in for a divestment of 8.9 million shares of their holding of 50 million shares. It was expected that a public listing would not only enhance its capital base but also its image.

India International was set up in January 1988 as a locally-incorporated company in Singapore with an initial share capital of S$25 million. It has continued to produce profitable results in spite of operating in a competitive environment. With its record of profitable performance, it has become one of the leading general insurance operators in the Singapore market.

GIC and its subsidiaries have a representation in 17 countries -- either directly or through agencies.

Sengupta to review decision

The finance ministry has askedGIC chairman D Sengupta, who is also the chief of New India Assurance, to review the operations of the overseas units of all the four subsidiaries and suggest changes to meet the new challenges that lie ahead of them.

Sengupta said that it was necessary to reposition the strategy of the subsidiaries' overseas operation. ``Business should be focused to maximise capital employed in overseas operations,'' Sengupta said.

So far, these branches have been working as an extension of the Indian operation, which now needs to be changed to take care of local business needs, Sengupta said.

With a view to developing a suitable strategy, the overseas operations of all subsidiaries could be re-grouped area-wise.

After re-grouping, the companies can target selectively profitable business on the strength of their own capital base.

``Some of the companies may have to withdraw from some business and from some areas,'' Sengupta said.

Though New India has got a licence in Indonesia, it is having second thoughts onwhether to begin operations there. Similarly, the company may shut down its Philippines operations, which have not been doing well. New India is also planning to enter Vietnam.