Anil Ambani-controlled Reliance Capital Ltd is all set to start life insurance business with regulator IRDA approving the acquisition of Chennai-based AMP Sanmar Life Insurance Ltd.
The acquisition, part of the younger Ambani's strategy to make RCL an integrated financial services company, gives a direct entry to the company in the fast-growing life insurance business without seeking a fresh licence and with a ready-made customer base in place.
"The Insurance Regulatory and Development Authority has accorded its approval for 100 per cent investment in the equity of AMP Sanmar Life Insurance Company Ltd," RCL informed the stock exchanges on Friday.
RCL, which is believed to have shelled out Rs 100 crore (Rs 1 billion) for the takeover, had clinched the deal in August this year amid stiff competition from Aviva, HSBC and ICICI Prudential.
Reliance Capital, which has a net worth of Rs 4,500 crore (Rs 45 billion) and is India's third largest financial services company after ICICI and HDFC, is now awaiting RBI's nod for the takeover.
AMP Sanmar had cash balance of Rs 80 crore (Rs 800 million) according to the books of accounts, but also has about 9,000 agents and about 900 employees besides 90 offices across the country.
AMP Sanmar, which has a capital base of Rs 217.5 crore (Rs 2.17 billion), had demonstrated the highest growth among all the players at over 170 per cent with premium income of Rs 15 crore (Rs 150 million) from new businesses in April-May this year despite uncertainties after its Australian partner AMP decided to quit Indian operations.
Anil had previously said that the takeover marks the immediate entry of Reliance Capital into the growth area of life insurance in one of the world's fastest growing and most under-served markets.