Reliance General Insurance questioned by SEBI

Markets regulator Sebi has sought clarification from Anil Ambani-led Reliance Group’s firm Reliance General Insurance Company regarding its proposed initial share-sale.

Without disclosing details of clarifications sought, the markets watchdog has said ‘clarifications (are) awaited from lead manager’ on the company’s proposed initial public offer (IPO) as on November 24, latest weekly update of processing status of draft offer documents filed with Sebi showed.

The regulator may issue “observations” on the IPO document within 30 days from the date of receiving “satisfactory reply” from the lead merchant bankers to the clarification or additional information sought.

“Observations” from the Securities and Exchange Board of India (Sebi) is very pertinent for any company planning to float a public offer like IPO, follow-on public offer (FPO) and rights issue.

As per the update, last communication received from the company was on November 23.

Reliance General Insurance had filed preliminary papers with Sebi to launch an IPO in October. The proposed public issue consists of fresh issue of over 1.67 croreshares by the insurance company, besides, an offer for sale of 5.03 crore scrips by Reliance Capital.

According to sources, the company’s valuation is expected to be more than Rs 6,000 crore.

Proceeds from the fresh issue would be utilised towards augmenting the solvency margin and consequently raising the solvency ratio. In addition, , funds will be used to meet future capital needs, which are expected to arise out of growth.

The company has appointed Motilal OswalInvestment Advisors, Edelweiss Financial Services, UBS Securities, Credit Suisse Securities (India) Pvt Ltd
Haitong Securities and IDBI Capital Markets & Securities to manage its IPO.

In September, the company had received in-principle approval from insurance sector regulator IRDAI for the IPO.

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