Reliance General Insurance on Monday announced plans to list on stock exchanges via an initial public offering in FY18, thereby joining other non-life insurers GIC Re, New India Assurance and ICICI Lombard General Insurance which have already announced such plans.

The shareholding of Reliance Capital, which owns 100 per cent stake in Reliance General Insurance (RGI), will get diluted by 10 per cent through the listing. Company officials said the quantum of funds that will be raised is subject to valuation and the same will be disclosed over the next few days.

According to market regulator SEBI’s minimum public shareholding norm, an entity which is listed on stock exchanges must ensure that at least 25 per cent of its equity is widely held within three years from listing. Going by this norm, RGI’s shareholding in India’s sixth-largest non-life insurer has to come down to 25 per cent by 2021.

Unlocking value

Rakesh Jain, ED & CEO, said the listing move, which is subject to necessary approvals from shareholders, regulatory and others, is aimed at unlocking shareholder value at a time when the general insurance industry is slated to grow with the economy.

“The Indian general insurance market is growing steadily… The coming years are likely to witness double-digit growth in the sector largely due to disproportionately low penetration of insurance,” said Jain.

RGI recorded gross written premium of ₹4,007 crore, registering 40 per cent year-on-year growth in FY17. Profit before tax stood at ₹130 crore, up 32 per cent while the investment book stood at ₹6,724 crore, up 25 per cent for the year ending March 31, 2017.

The non-life insurer operates through a network of 129 branches in 102 cities and 24,500 agents. It also has partnerships with banks such as IndusInd Bank, Bank of India, Andhra Bank and Catholic Syrian Bank, said a company statement.

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