Business Standard

Monday, January 06, 2025 | 02:53 AM ISTEN Hindi

Notification Icon
userprofile IconSearch

Reliance Life mulling stake sale to raise Rs 1,500 cr

Image

Press Trust of India New Delhi

Anil Ambani-promoted Reliance Life Insurance is understood to be in talks with global insurance players, including Swiss Re, to raise an estimated Rs 1,500 crore by selling 10-15 per cent stake.

"Reliance Life Insurance is looking to offload 10-15 per cent stake to raise an estimated Rs 1,500 crore and is talking to various players, including Swiss Re," investment banking sources in know of the development said.

As per the current rules, a foreign entity can hold up to 26 per cent stake in an Indian insurance firm. Reliance Capital wholly owns Reliance Life, a business it acquired from AMP Sanmar in 2005.

 

A Reliance Life spokesperson could not be contacted, while KwokChoi Wong Director Communications Swiss Re (Asia Division) said "Swiss Re does not comment on market rumours."

For nearly a year, Reliance Capital has been planning either an IPO or strategic sale of its life insurance business to unlock value for shareholders.

Going by the estimated deal size, Reliance Life would have an enterprise value of over Rs 15,000 crore.

The life insurance business of the company has grown rapidly over the last four years and it has emerged among the top four private life insurance players in the country, although state-run LIC is the dominant player with over 60 per cent market share.

Post the strategic stake sale to foreign firms, Reliance Life could also come out with an IPO, according to sources.

"Depending on the interest from foreign firms (for buying a maximum of 26 per cent stake), the company (Reliance Life) could come out with an IPO," the source said.

Last year, the Chief Executive of Reliance Capital Sam Ghosh had said that Reliance Life expects total premium to quadruple to about Rs 20,000 crore in 2011-12 from Rs 4,930 crore at the end of 2008-09.

India now has 22 life insurers after the market was opened in 2000.

Capital market regulator Sebi is expected to come out with the IPO guideline for insurance firms next month.

Insurance sector regulator IRDA, which has been working on the guidelines along with the market regulator Securities and Exchange Board of India (SEBI), is likely to come out with a draft for public comments before issuing the final norms.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Mar 29 2010 | 3:30 PM IST

Explore News