We are in talks for sale of 26% stake in general insurance business to a foreign strategic partner, said Reliance Capital CEO Sam Ghosh.
Without disclosing any names or potential deal size for Reliance General Insurance stake sale, Ghosh said that nothing has been finalised as yet and talks are still continuing.
Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group, has already sold 26% stake in each of its mutual funds and life insurance units to Japanese financial services major Nippon Life.
Reliance Capital chief said the group is open to the idea of selling further stake in its life insurance unit, Reliance Life, as also in mutual funds arm, Reliance Capital Asset Management Company, at an appropriate time and the understanding with Nippon Life in this regard is open-ended.
Nippon Life, one of the worlds largest financial services group with assets under management of over $600 billion (more than R30 lakh crore), is a major player in life insurance and asset management businesses in Asia, but is not present in general insurance segment.
Currently, foreign investment is capped at 26% in the insurance business in India, but there are no such caps in the mutual funds segment. However, the government is considering increasing the foreign investment limit in the insurance sector to 49%.
Asked whether the group would be open to the idea of Nippon having a higher stake in Reliance Life when government hikes insurance FDI cap to 49%, Ghosh said: The two companies have an understanding that if the market is opened up further, they would discuss the issue at that time.
Any decision in that regard will be taken only after the government further opens the sector and current understanding between the two partners is open-ended, he said. Asked whether Reliance Cap would consider higher stake for Nippon Life in its mutual fund business as well, Ghosh said that the understanding was same for Reliance Capital Asset Management Company as well.
Currently, there are no discussions underway for a hike in Nippons stake in RCAM (Reliance Capital Asset Management Company), although there is no FDI cap in this business, but the understanding is open-ended between the two partners on this front, he said.
Nippon holds 26% stake in RCAM, which it acquired for about R1,450 crore. Besides, Nippon has also purchased a 26% stake in Reliance Life for over R3,000 crore.