Reliance General files draft papers for IPO

Reliance General Insurance, part of Anil Ambaniled Reliance Group, Monday filed draft papers with markets regulator Sebi for an initial public offer. The IPO comprises fresh issue of little over 1.67 crore shares by the company and an offer for sale by Reliance Capital of 5.03 crore shares, according to the draft papers. Another group firm -- Reliance Nippon Life Asset Management - has already filed preliminary papers with Sebi to float an IPO and is awaiting the regulator's nod.

Reliance General Insurance plans to utilise the proceeds from the fresh issue towards augmenting the solvency margin and consequently increase the solvency ratio. Besides, the money will be used to meet future capital requirements, which are expected to arise out of growth, as per the draft papers.

At the end of March this year, Reliance General Insurance's book value stood at Rs 1,250 crore. The company's valuation is expected to be over Rs 6,000 crore, an average multiple of around five times, merchant banking sources said. Reliance General Insurance, which received inprinciple approval from insurance sector regulator IRDAI last month for the IPO, expects to get listed in the current financial year. Currently, ICICI Prudential Life Insurance and SBI Life Insurance are the only listed insurers.

Reliance General will be the 4th general insurance company to list, after the recently listed ICICI Lombard. GIC IPO will be open for subscription from Oct 11-13