Within days of government allowing more overseas investment in insurance sector through an ordinance, Anil Ambani-led Reliance Group has initiated a process for inducting foreign partners in its general and health insurance ventures with up to 49 percent stakes.
Besides, the group’s financial services arm Reliance Capital would soon begin “active discussions” for Japanese giant Nippon Life hiking its stake in Reliance Life Insurance Company (RLIC) to 49 per cent, from 26 per cent at present.
“Initial discussions have already been held with Nippon for additional stake in our life insurance venture, while preliminary talks have taken place with some prospective partners for health insurance and the rest of general insurance businesses as well,” Reliance Capital CEO Sam Ghosh told in an interview.
The discussions could not move to advanced levels earlier, as the investors were waiting for clarity on foreign investment policy for the sector. Active discussions would now begin as the government has allowed up to 49 per cent foreign investment by promulgating an ordinance.
While Nippon Life is interested in hiking its stake in Reliance Life to 49 percent, Reliance Capital may bring in a new foreign partner for up to 49 percent stake in its general insurance venture as well, Ghosh said.
Besides, the company plans to hive off its health insurance business into a separate company and would look at bringing in a strategic partner there as well with up to 49 per cent stake, he added.
“While initial discussions have been continuing with some prospective partners in these areas, they were awaiting clarity on policy front and active discussions are likely to start now pursuant to the promulgation of the insurance ordinance,” Ghosh said.
Health insurance accounts for 25 percent of total general insurance business and this business has strong growth potential in the long term, he added.
Financial services major Reliance Capital last month reported 20 percent rise in its second quarter net profit at Rs 217 crore, helped by robust growth in mutual fund, commercial finance and general insurance businesses. Total income rose by 12 percent to Rs 2,084 crore for the quarter ended September 30.