Reliance General Insurance Scraps IPO Plan; Withdraws Offer Documents
Reliance General Insurance Company Ltd., part of Anil Ambani-led Reliance Group, has decided to withdraw its proposed initial share sale offer.
The initial public offering was slated for the fresh issue of shares worth Rs 200 crore, besides an offer of sale of 79,489,821 shares by Reliance Capital Ltd.
Markets regulator Securities and Exchange Board of India had received draft red herring prospectus for the proposed Initial Public Offer on Feb. 8 through the lead manager of the issue Motilal Oswal Investment Advisors. However, the draft offer documents for the IPO have been "withdrawn by LM (Motilal Oswal Investment Advisors) vide email dated Oct. 24, 2019," according to SEBI.
Reasons for withdrawal of the offer documents have not been disclosed.
Any company looking to raise funds through the sale of shares to public investors by way of instruments such as IPOs needs to get a clearance from SEBI for the same. Proceeds of the proposed issue were to be utilised for future capital requirements, expected to arise from the growth and expansion of the business, improving solvency margin and consequently solvency ratio.
Earlier in October 2017, Reliance General Insurance approached SEBI with its IPO papers for which it received the regulator's approval in November 2017. However, the company had failed to tap primary markets as a lack of investors' appetite for the IPO, and volatile equity market conditions had forced the insurer to postpone its plans.