Anil Ambani has been on a buying spree all these months picking up stakes in diverse companies through his financial services arm Reliance Capital.
But now it seems he is looking for a buyer who will acquire minority stake in his insurance ventures. And foreign players waiting for a foothold in India are queuing up for a piece of the action.
NDTV has learned that ADAG group company Reliance Capital is planning to rope in a partner for the insurance business. The group is likely to sell 26 per cent each in its life and non-life insurance businesses.
ADAG is in talks with private equity funds and foreign insurance companies for the stake sale. Reliance Capital has however declined to comment on the stake sale plans.
Unlike its competitors Reliance did not take the joint venture route for its entry into the insurance business and so far it has been quite successful in growing the business.
But now the group wants to take its insurance venture into the next level and that's why it feels that a right partner could bring in cash and expertise especially for the life insurance business, which is capital intensive.
Investment stage
Reliance's insurance businesses are valued at around $1.2-1.75 billion and contribute about 25-30 per cent of the price of the Reliance Capital share. Reliance ranks second in general insurance and fifth in life insurance among the private players.
For private insurance players like Reliance it is now the investment stage where they have to pump in money to build their distribution network and also meet regulatory requirements.
It will take a while for many of them to break even in the life insurance segment though ADAG group is not short of cash it may want to realise value when the going is good and when other players like ICICI Prudential and SBI Life are also looking at diluting the group holdings.
Source : NDTV Profit