MUMBAI: It’s raining IPOs in the insurance industry and the latest to join the IPO binge is Anil Ambani-led Reliance Group. Reliance on Monday said its general insurance venture is heading for an initial public offer, which according to estimates is likely to value the company at Rs 6,000 crore.
The move comes days after another group firm — Reliance Nippon Life Asset Management Company — announced plans to get listed. The company may consider roping in a strategic partner through the proposed stake sale. Currently, ICICI Prudential Life Insurance is the only listed insurer in the country.
Reliance General is among the several other general insurers including ICICI Lombard General Insurance, New India Assurance and General Insurance Corporation of India (GIC Re) who are looking to list on the stock exchanges in this fiscal. The company’s board on Monday approved the proposal to list on the exchanges. As per the listing guidelines, they will divest 10 per cent stake in the first year and 25 per cent by FY21.
At March-end, Reliance General Insurance’s book value stood at Rs 1,250 crore. Proceeds from the IPO would be utilised for organic and inorganic expansion as the company looks to double its topline of Rs 4,000 crore in the next four years. The company also plans to induct a strategic partner using the stake sale and would continue to look for a partner even after listing, it said in a statement.
Reliance General Insurance CEO and executive director Rakesh Jain pointed out that general insurance industry is slated to grow with the economy where affluence-led consumption would act as its primary growth driver. “The listing will enable retail investors to participate in this high growth and new wealth creation opportunity,”Jain said in a statement.