The Insurance Regulatory and Development Authority (IRDA) has asked Indiabulls to raise a capital of ₹1,200 crores for stepping into the life insurance business amid the NBFC crisis that hurt the valuations of the housing finance subsidiary as well.
“We have asked Indiabulls to show a capital commitment of ₹1,200 crores before it gets the preliminary license to start the life insurance business,” said a source close to the development at IRDA.
A board meeting is to be conducted on December 21 which will discuss the matter and most likely provide Indiabulls with the R1 license to operate. It would be the company’s second attempt to get into the life insurance sector, first being a tie-up with the Societe Generate, which was not pursued later.
The company has infused a capital of ₹100 crores already in the life insurance venture and its parent company, Indiabulls Integrated Services Ltd (IISL), has kept ₹1,200 crores aside for further investment.
“We have infused the life insurance company with around ₹100 crores and the parent has kept around ₹1,200 crores of additional capital, which it recently raised to infuse as and when we get the R1,” said a company spokesperson.
IISL is not related to the Indiabulls Housing Finance since it sold 100 percent shareholdings in the Indiabulls Life Insurance Company Ltd to SORIL Holdings and Ventures Limited.
The source added, “As and when we get R1, we can infuse capital within 24 hours and all records required for this have been submitted to Irda, including the details of the institutional investors which have infused capital in IISL.”