Law ministry seen in favour of Rel Life IPO bid

KOLKATA: The Union law ministry is understood to have taken a favourable view of the Reliance Life Insurance���s plea for a waiver of the 10-year restriction on initial public offers. The law ministry has sent back the application by the ADAG company back to the finance ministry, to which the original application was sent.

Sources said after the finance ministry has examined the recommendations of the law ministry, it will be forwarded to the Insurance Regulatory Development Authority (IRDA) for appropriate action. If Reliance Life is allowed to approach the IPO market, it will clear the way for other companies such as Bajaj Allainz, SBI Life and Kotak Life Insurance that are waiting to tap the equity market for funds.

Reliance Life had originally approached IRDA for an IPO. The regulator had, however, informed the company that private insurers are not allowed to float any IPO before completing 10 years of operations. Reliance Life, floated in 2005, is just about five-years old, and according to the present set of regulations, it cannot float an IPO unless it gets a government permission to do so.

However, at present, there are no detailed guidelines on IPO for private insurers. But Reliance Life will have to wait till IRDA comes out with such set of rules for private companies.

When asked on the development, Reliance Capital chief executive Sam Ghosh said: ���We have approached the finance ministry for a waiver and are awaiting its response.��� Reliance Life is part of the Anil Ambani-led Reliance Capital.