Anil Ambani Group company Reliance Life Insurance will infuse Rs 250 crore to fund business expansion plans in FY'11, out of which Rs 70 crore was pumped in during the first quarter itself.
"So far as capital infusion is concerned, we need Rs 250 crore in 2010-11. After investing Rs 70 crore in the first three months of this fiscal, we have plans to infuse Rs 180 crore in the next three quarters," Reliance Life Insurance President and Executive Director Malay Ghosh told PTI.
With the Rs 70 crore infusion, the total paid-up capital of the company has crossed Rs 3,000 crore mark. The paid-up capital of the company stood at Rs 3,044 crore at the end of June 30, 2010.
Besides the capital infusion, Reliance Life Insurance is also looking at selling a 10-15 per cent stake to a strategic investor to raise funds for expansion.
The company proposes to come out with initial public offer (IPO) once the guidelines are put in place by sectoral regulator Insurance Regulatory and Development Authority (IRDA) and market watchdog Securities and Exchange Board of India (SEBI).
"We plan 10-15 per cent strategic divestment and 10 per cent through IPO. Once the IPO guidelines are in place, we will look into the guidelines and take the call accordingly," he said.
IRDA has indicated that it will soon come out with IPO guidelines that will allow life and non-life insurance companies to raise funds from the capital market.
Several private sector insurers, including Reliance Life Insurance and HDFC Standard Life, have shown an interest in tapping the capital market to augment their resource base.
Reliance Life Insurance, which recorded a 33 per cent rise in total premium income at Rs 1,201 crore for the quarter ended June this fiscal, is targeting a premium of Rs 10,000 crore in 2010-11, higher than its Rs 6,605 crore premium income in 2009-10.
As part of expansion plans, Reliance Life envisages hiring 3,000 sales managers this fiscal.
At the same time, the insurer will also appoint about 1.5 lakh insurance agents this year.