The Anil Ambani-controlled Reliance Capital will float an iniitial public offering (IPO) of equity for its general insurance arm and list on the stock exchange. This could give the company a valuation of Rs 6,000 crore.
Reliance General Insurance is targeting an IPO by the end of this financial year. It might also look for a strategic partner.
Fully owned by Reliance Capital, it is planning to dilute 10 per cent of its shareholding in 2017-18. In the next three years, to dilute 25 per cent.
Rakesh Jain, executive director and chief executive, said listing would enable individual investors to participate in a high growth and new wealth creation opportunity. The company has not ruled out the possibility of stake sale and thereby getting a strategic partner but gave no time line for this.
In the general insurance business, ICICI Lombard and government-owned New India Assurance and General Insurance Corporation are planning to get listed in the near future. ICICI Prudential Life Insurance is the only one in that segment which has listed till now.
With 40 per cent growth in premiums earned in FY17, Reliance General Insurance got Rs 4,007 crore on this count, from Rs 2,792 crore in FY16. Profit before tax rose 32 per cent to Rs 130 crore in FY17. The investment portfolio at end-March was Rs 6,724 crore, up 25 per cent. Assets under management grew 25 per cent to Rs 6,700 crore.
He said the company is well positioned to capitalise on opportunities across retail, corporate and government supported consumer segments.
“The listing will enable retail investors to participate in this high growth and new wealth creation opportunity,” he said in a statement.
In the last financial year, the company saw a profit of Rs 130 crore and increased its investment book to Rs 6,724 crore.
This is the third company under Reliance Capital that has unveiled plans to get listed. The other two firms being Reliance Home Finance and Reliance Asset Management.
In the last two years, there have been quite a few deals involving general insurance companies. These include HDFC Ergo General Insurance's acquisition of L&T General Insurance.
All these listings are expected to be completed this financial year.