Reliance Capital mulls options for Reliance Life Insurance

Reliance Capital may go for a stake sale in its life insurace business or an IPO in its insurance insurance business. Other options reportedly under consideration are entry into private equity and investment banking business.

Anil Ambani, chairman of Reliance Capital said at the company's annual general meeting on Tuesday that an IPO, a strategic stake sale or a financial stake sale or a combination of these options was being considered for the four-year-old Reliance Life Insurance. He added that a final decision in the matter would be taken soon.

Reliance Life Insurance has emerged as among the leading insurance players in the country but the company has not yet broken even and the IPO plans would also take time to be operationalise. The Insurance Regulatory Development Authority has not issued guidelinens for IPOs for private sector insurance companies.

The company's last fiscal saw new premium generation soar over Rs3,500 crore posting a growth of over 28 per cent. The company with over three million policies in force has a distribution network comprising 1,145 branches and 1.5 lakh agents.

Reliance Capital is also in the process of entering the investment banking businesses in the next 12 months.

The IPO would see Reliance Life Insurance emerge as one of a handful of private companies in the business that operate without a foreign partner. It could also be among the first of a lot of life insurance players to seek to raise funds through the capital market ahead of other companies planning similar moves.