Reliance General Insurance scraps IPO plan

Reliance General Insurance, part of the Anil Ambani-led Reliance Group, has decided to withdraw its proposed initial public offering (IPO).

The IPO was slated for fresh issue of shares worth ~200 crore, besides an offer of sale of 79,489,821 shares by Reliance Capital. Market regulator Securities and Exchange Board of India (Sebi) had received the draft red herring prospectus for the proposed IPO on February 8 through lead manager (LM) of the issue Motilal Oswal Investment Advisors.

However, the draft offer documents for the IPO have been “withdrawn by LM (Motilal Oswal Investment Advisors) vide email dated October 24, 2019,” according to Sebi.

Reasons for withdrawal of the offer documents have not been disclosed.

Any company looking to raise funds through sale of shares to public investors by way of i nstruments such as IPOS need to get a clearance from Sebi for the same.

Proceeds of the proposed issue was to be utilised for future capital requirements, expected to arise from the growth and expansion of the business, improving solvency margin, and consequently solvency ratio.

Earlier in October 2017, Reliance General Insurance approached Sebi with its IPO papers, for which it received the the regulator's approval in November 2017.

However, the company had failed to tap primary markets as lack of investors’ appetite for the IP O, and volatile equity market conditions had forced t he insurer to postpone its plans.