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June 8, 2009updated 13 Apr 2017 8:56am

India’s first insurance IPO mooted

Financial services group Reliance Capital, a unit of Indian conglomerate Reliance-Anil Dhirubhai Ambani Group, is to reduce its stake in its wholly-owned life insurance subsidiary Reliance Life Insurance (RLI) by 26 percent, according to numerous reports in Indias media

By LII editorial

Financial services group Reliance Capital, a unit of Indian conglomerate Reliance-Anil Dhirubhai Ambani Group, is to reduce its stake in its wholly-owned life insurance subsidiary Reliance Life Insurance (RLI) by 26 percent, according to numerous reports in India’s media.

The reduction, indicate the reports, could possibly come by way of the introduction of a foreign partner or an initial public offer aimed at raising up to $200 million in new capital.

Launched in 2003, RLI has since proved to be one of India’s private insurer success stories particularly in a market where it is unique in not having a foreign insurance partner.

Reflecting this success, in its financial year ended 31 March 2009 Reliance Capital reported that RLI had achieved new business premium income of $547 million, up 28 percent compared with the previous financial year.

RLI’s premium income growth in the 2008/09 financial year came against the background of the Indian life industry’s 6.3 percent fall in new premium income to $19 billion, and saw RLI increase its share of the private sector life insurance market from 8.1 percent to 10.3 percent.

In the private life sector RLI ranked fourth in 2008 behind ICICI Prudential (21 percent share), SBI Life (15 percent) and Bajaj Allianz (13 percent).

During the financial year Reliance Capital injected additional capital of $268 million into RLI, doubling its total capital to $538 million.

RLI’s product distribution relies on its branch network which was increased from 745 to 1,145 during the 2008/09 financial year and a tied agency force which fell from 184,233 to 149,613.

The decline in the agency force reflected a focus on enhanced productivity, note Reliance Capital.

Financial services group Reliance Capital, a unit of Indian conglomerate Reliance-Anil Dhirubhai Ambani Group, is to reduce its stake in its wholly-owned life insurance subsidiary Reliance Life Insurance (RLI) by 26 percent, according to numerous reports in India’s media.

The reduction, indicate the reports, could possibly come by way of the introduction of a foreign partner or an initial public offer aimed at raising up to $200 million in new capital.

Launched in 2003, RLI has since proved to be one of India’s private insurer success stories particularly in a market where it is unique in not having a foreign insurance partner.

Reflecting this success, in its financial year ended 31 March 2009 Reliance Capital reported that RLI had achieved new business premium income of $547 million, up 28 percent compared with the previous financial year.

RLI’s premium income growth in the 2008/09 financial year came against the background of the Indian life industry’s 6.3 percent fall in new premium income to $19 billion, and saw RLI increase its share of the private sector life insurance market from 8.1 percent to 10.3 percent.

In the private life sector RLI ranked fourth in 2008 behind ICICI Prudential (21 percent share), SBI Life (15 percent) and Bajaj Allianz (13 percent).

During the financial year Reliance Capital injected additional capital of $268 million into RLI, doubling its total capital to $538 million.

RLI’s product distribution relies on its branch network which was increased from 745 to 1,145 during the 2008/09 financial year and a tied agency force which fell from 184,233 to 149,613.

The decline in the agency force reflected a focus on enhanced productivity, note Reliance Capital.

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