The world is changing!
Reliance General Insurance Co. Ltd, the non-life insurance arm of Reliance Capital Ltd, on Monday said it has filed draft papers with the Securities and Exchange Board of India (Sebi) for an initial public offer (IPO).
The IPO comprises fresh issue of little over 1.67 crore shares by the company and an offer for sale by Reliance Capital of 5.03 crore shares, according to the draft papers.
Another group firm—Reliance Nippon Life Asset Management—has already filed preliminary papers with Sebi to float an IPO and is awaiting the regulator’s nod.
Reliance General Insurance plans to utilise the proceeds from the fresh issue towards augmenting the solvency margin and consequently increase the solvency ratio. Besides, the money will be used to meet future capital requirements, which are expected to arise out of growth, as per the draft papers.
At the end of March this year, Reliance General Insurance’s book value stood at Rs1,250 crore. The company’s valuation is expected to be over Rs6,000 crore, an average multiple of around five times, merchant banking sources said. Motilal Oswal Investment Advisors, Credit Suisse Securities (India) Pvt Ltd, Edelweiss Financial Services and UBS Securities are the global co-ordinators and book running lead managers to the issue. Haitong Securities and IDBI Capital Markets & Securities are the book running lead managers.
Reliance General Insurance, which received in-principle approval from the Insurance Regulatory and Development Authority of India (Irdai) last month for the IPO, expects to get listed in the current financial year.
Currently, ICICI Prudential Life Insurance and SBI Life Insurance are the only listed insurers in the country. The Rs11,370 crore IPO of state-owned General Insurance Corporation of India’s (GIC) will open on 11 October.
Shares of Reliance Capital closed at Rs567.50, up 2.76%, on BSE, while the Sensex closed 32.67 points up to 31,846.89.