Three foreign insurance firms have approached Reliance Capital about buying a stake in its life insurance business before a planned listing, the financial services firm's chief executive said on Monday.

The firm, which has operations in asset management, insurance, mortgages, and broking, and owns stakes in two commodity bourses, plans to set up a small investment banking team by March and close a private equity fund by this year, Sam Ghosh told the Reuters India Investment Summit,

Reliance Capital plans to sell up to 26 percent of its Reliance Life unit, including through an initial public offering, and has said it would sell about 10 percent to a strategic investor ahead of a listing.

"We would obviously like a life insurance company, someone who hasn't come to India. About three globally have approached us," he said, adding some private equity funds had also expressed interest in taking a stake in the unit.

Reliance Life, the country's No. 4 private life underwriter by assets under management, is seeking a waiver from a requirement that an insurance company be in business for 10 years before an IPO.

It aims to be the first Indian life underwriter to list, and Ghosh said he was confident of getting government approval.

"Finance ministry is waiting for approval from the insurance regulator. It is a technical interpretation of the act," he said, adding the finance ministry could waive the 10-year requirement.

India now has 22 life insurers, after the market was opened in 2000 to challenge state-owned Life Insurance Corp's monopoly. Existing regulations prevent insurers from selling stakes of more than 26 percent to foreign partners.

Some of the first foreign-backed insurance joint ventures, including between ICICI Bank and Prudential Plc, Max India and New York Life, and Housing Development Finance Corp and Standard Life, are said by market players to be eyeing IPOs after they cross the 10-year mark next year.


Ghosh said Reliance Life expected annual growth of up to 20 percent in premiums earned for the fiscal year to March 2010, marginally faster than peers, but still sees a "small loss" for the fiscal year. Ghosh has earlier said that unit aimed to breakeven by the next financial year.

Reliance Life expects total premium to quadruple to about 200 billion rupees ($4.3 billion) in 2011/12 from 49.3 billion rupees at the end of 2008/09, Ghosh said in September.

Reliance Capital, part of the Anil Dhirubhai Ambani Group, also runs India's top mutual fund, Reliance Capital Asset Management.

It wants to build an investment banking team by March and close a 10 billion to 15 billion rupees private equity fund by December.

"We have the distribution element, a large number of franchisees, 6,000 plus, and an investment banking licence," he said, saying such a move was a natural progression.

"We have raised retail money for IPOs. We should gradually move into getting mandates."

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