Rel Cap plans IPO, sale in life insurance business
Wed, Jul 22 03:45 PM
Reliance Anil Dhirubhai Ambani group (ADAG) company Reliance Capital plans to sell stake in
subsidiary Reliance Life Insurance through an initial public offering (IPO) or to strategic or
financial investors. There could even be "a combination of both", subject to necessary approvals,
ADAG Chairman Anil Ambani said at Reliance Capital's annual general meeting on Tuesday.
Reliance's life insurance business has over the past four years grown rapidly to emerge among
the top four private life insurance players in the country. "We are now considering various
options to unlock this value.
A final decision in this matter will be taken shortly," Ambani said. Reliance Capital charted out
two new businesses, institutional broking and private equity, in 2008-09.
In the current fiscal year, the company plans to add "strength and muscle" to these ventures.
Another group firm, Reliance Infrastructure, which achieved financial closure for projects worth
Rs 32,000 crore in a year, currently has cash or cash equivalents of nearly Rs 10,000 crore on its
balance sheet, Ambani said.
"What we also have to keep in mind is that foreign funds are already investing in India through
the QIP and FII route." "Initially, analysts thought the excitement seen in the QIP route was due
to dollar carry trade by institutional investors, who borrowed in the US at lower rates and
invested in emerging markets like India.
With increasing excitement in the ADR/GDR route, it is now clear that investors are really
interested in the Indian corporate sector," said Jagannadham Thunuguntla, Head-Equity
at SMC Capital.