RCap may list life insurance arm

In order to secure future capital needs, Reliance Capital, an Anil Dhirubhai Ambai Group company, is planning to divest 10 to 26 per cent stake in its 100 per cent-owned subsidiary, Reliance Life Insurance, reports Falaknaaz Syed.

In order to secure future capital needs, Reliance Capital, an Anil Dhirubhai Ambai Group company, is planning to divest 10 to 26 per cent stake in its 100 per cent-owned subsidiary, Reliance Life Insurance.

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“We are looking at divesting 10 per cent to 26 per cent stake in Reliance Life insurance,” said Sam Ghosh, CEO, Reliance Capital. “ This could be through an IPO or directly to a strategic partner or through a combination of both. We will decide in a week’s time and approach the regulators (IRDA and Sebi) for their approvals.”

Explaining the reasons for divesting the stake, Ghosh said, “It is a good time to divest. There may be two anchor investors. The strategic investors will help in bringing the technical expertise and the capital. In case we decide on divesting through IPO, then our capital requirements will be taken care of.”

When asked if investors would buy shares of a loss-making company, Ghosh said that investors have bought shares of loss-making companies in the past too.

Last week, P Nandagopal, CEO of Reliance Life Insurance put in his papers to join Baroda LG Life Insurance Company.

Meanwhile, Reliance Capital scrip on Friday surged 5.34 per cent to close at Rs 903 on the BSE and at Rs 903.30, up 5.30 per cent on the NSE.