Reliance General Insurance Company Limited has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator SEBI seeking permission for its Initial Public Offering (IPO). Reliance General Insurance, part of Anil Ambani’s Reliance Capital, is one of the leading private-sector general insurance company’s in India.
Reliance General Insurance IPO comprises of an offering of up to 67,079,979 equity shares of face value of INR10 each of Reliance General Insurance Company Limited. The offer comprises of a fresh issue of up to 16,769,995 equity shares by Reliance General Insurance Company Limited and an offer for sale by Reliance Capital Limited of up to 50,309,984 equity shares. As of now, Reliance Capital owns 100% equity in Reliance General Insurance Company.
Net Proceeds from the fresh issue will be utilized for (i) augmenting the solvency margin and consequently increase the solvency ratio and (ii) to meet future capital requirements which are expected to arise out of growth.
Motilal Oswal Investment Advisors Limited, Credit Suisse Securities (India) Private Limited, Edelweiss Financial Services Limited and UBS Securities India Private Limited are the Global Co-ordinators and book running lead managers to the issue. Haitong Securities India Private Limited and IDBI Capital Markets & Securities Limited is the book running lead managers and Karvy Computershare Private Limited is the Registrar.
Reliance General Insurance IPO: Robust financial performance
In the financial year 2017, Reliance General Insurance issued over 4.10 million policies and its gross direct premium income (GDPI) stood at INR39,353.51 million (INR3935.3 crore). This was split between INR19,626.52 million, or 49.9% of total GDPI, from motor insurance, INR10,894.35 million, or 27.7% of total GDPI, from weather and crop insurance, INR3,443.30 million, or 9.7% of total GDPI, from health insurance, INR3,529.66 million, or 9.0% of total GDPI, from fire and engineering insurance and INR499.93 million, or 1.3% of total GDPI, from marine insurance.
Its net profit after tax increased to INR1,287.28 million in the financial year 2017 from a loss of INR372.80 million in the financial year 2013. As of 30 June 2017, the company’s solvency ratio stood at 1.70x compared to the IRDAI-required control level of 1.50x.
This is second company from Anil Ambani group looking to raise public funds. Reliance Nippon Life Asset Management, the asset management arm of the group’s life insurance company, is also awaiting SEBI clearance for launching IPO.