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Anil Ambani-led Reliance Life Insurance is seeking for an international strategic partner who will be holding 20% stake of the firm. It also has plans for coming out with an IPO.
"We have started the process of identifying the strategic investor," said Sam Ghosh, chief executive of Reliance Capital. "The process will take around four months time," Ghosh told.
"A strategic investor will enable us to discover the right price for our share as we are planning a public issue. From business point of view we do not need an overseas partner. But an overseas life insurer will be a better for our business," he said.
Reliance Life is an arm of Reliance Capital.
The IPO will be offered depending on the permission received from the government to go public. Reliance Life has plans for divesting about 20%, 10% of which will be offered as IPO.
If government denies permission to go public, the 20% stake will be provided to international strategic partner.
Reliance Life, he said, requires about Rs.400 crore ($80 million) as additional capital this year and first half of nest fiscal for meeting the demands of solvency norms. "There won't be any expense over-run for the company from next year onward. We will break even next fiscal."
When asked on the cap on charges and its impact on business plans of the firm, Ghosh said: "Our insurance products are priced properly and profitably to meet the expenses. As such we are not affected by the cap on charges."
Targeting premia of Rs.20,000 crore ($4 billion) in new policies and renewals, Reliance Life also plans to expand its branch network to 1,600 over the next two years from 1,250 branches at present.
For the current year, Reliance Life is confident of earning a total premium of Rs.9,000 crore, with new and renewals contributing equally. "Our plan is to grow our new business annually by 25 percent. Renewal premium will fetch the balance."
According to him, the company is targeting asset under management of Rs.15,000 crore ($1.5 billion) by the end of this year, Rs.40,000 crore ($8 billion) by 2013 from the current levels of Rs.10,000 crore ($2 billion).
"By 2013 we will be one of top life insurers in terms of AUM," he said. He also mentioned that the firm will be decreasing the focus on unit linked insurance policy to the 80% from the current 93%. Emphasis on traditional policy will be increased.
"Health will be around 4 percent”, he added.
