Reliance Insurance files for India IPO

According to a prospectus, the offer will comprise a fresh issue of up to 16.8 million shares and an offer by Reliance Capital of up to 50.3 million shares. Currently, Reliance Capital holds 100% of the company with 252 million shares; with its secondary sale and the newly issued shares, its stake will be diluted to 75%. Pricing has not yet been announced.

Proceeds from the offer will primarily be used to increase Reliance General's solvency ratio, allowing it to meet future capital requirements expected to result from future growth in the business. The company also hopes to enhance its visibility and brand name among existing and potential customers through the exposure generated by a public listing.

Reliance General is among India's top five non-life insurance providers based on gross direct premium income (GDPI). The company offers a range of products including automotive, health, fire, marine and agricultural insurance through multiple distribution channels. Revenue came to INR1.5 billion for the year ended March 2017, up from INR1.1 billion the previous year. Over the same period, net profit grew from INR1 billion to INR1.3 billion.

Two other PE-backed insurance providers have pursued IPOs this year: SBI Life, the life insurance subsidiary of the State Bank of India (SBI), and ICICI Lombard General Insurance both launched their offerings last month. SBI Life sold 120 million shares in its oversubscribed IPO at INR700 per share, all from existing investors SBI and BNP Paribas; PE backers KKR and Temasek did not exit.

ICICI Lombard's offering also consisted entirely of shares from existing shareholders, other than Warburg Pincus, Tamarind Capital and IIFL Asset Management. The company sold 86 million shares at INR661 apiece.

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• Topics
• South Asia
• Financials
• IPO
• India
• insurance
• Reliance Capital
• Exit