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Reliance capital to sell 26 percent stake in its general insurance business to a foreign partner

Last Updated: Nov 20, 2012 | 1529 Views

Logo of Reliance General InsuranceReliance Capital Group, one of the largest Financial Services Provider, has decided to sell 26% of their stake in its General Insurance Business to a foreign company. They are also open to sell more shares in their Life Insurance and Mutual Fund businesses.

Mr. Sam Ghosh, Chief Executive Officer, Reliance Capital, announced that the company has proposed to sell 26% of it share holdings of general insurance business to an undisclosed foreign partner. He further added that the negotiations are at the preliminary stage and no concrete decision has yet been taken. The company has already sold 26% of its share holdings in Mutual Fund and Life Insurance business to one of the largest financial service group Nippon Life. He further added that the company may consider selling additional stake in life insurance and mutual fund business later.

Reliance Capital is a part of the Reliance group. It is one of the leading and valuable financial services company in the private sector. It has a diversified business comprising of mutual funds, assets management, stock broking, life and general insurance, private equity, wealth management, and other activities in financial services. Reliance Mutual Fund is amongst the top two Mutual Funds in India. Reliance Life Insurance and Reliance General Insurance are amongst the leading private sector insurers in India. Reliance Securities is one of India's leading retail broking houses. Reliance Money is one of India's leading distributors of financial products and services.

At present the maximum of foreign investment in insurance business is curtailed to 26% but government is planning to enhance its limit to 49%. However there is no such cap in mutual fund segment. Thus, once the 49% norm becomes applicable, this deal can go through. In reply to selling additional stake in Life Insurance business to Nippon Life in case FDI is hiked to 49%, Mr. Ghosh  said that decision regarding the same will be taken when government takes decision to hike the limit and nothing can be confirmed as of now. However, with regards to additional sale of stake in mutual fund segment, Mr. Ghosh stated that the discussion is ‘open – ended’ in this regard and no final decision has yet been taken.
 

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