Reliance Life Insurance Company will have to wait for some more time as the finance ministry has referred its proposal to list the company to the law ministry for approval. The ADAG group company is seeking government’s approval to launch its initial public offer (IPO) to unlock value in the life insurance firm.

“We are fine with the proposal sent by the life insurance company but since it involves some sections in the Act, we have sought law ministry’s view on the subject. We will take final decision once we get a reply from them,” said a finance ministry official who did not wish to be named.

“We have grown rapidly in our life insurance business. And are now considering various options to unlock this value — from a potential IPO to strategic or financial stake sale, or even a combination of both — subject to necessary approvals. A final decision in this matter will be taken shortly,” Reliance Capital chairman Anil Ambani had said earlier at the company’s annual general meeting this month.

The major impediment in doing this is the law. The Insurance Act, 1938, through Section 6AA allows promoters of life, general and re-insurance companies to divest stake in excess of the 26 per cent of the paid-up equity capital in a phased manner only after 10 years of operation or as may be prescribed by the Central government. Reliance Life Insurance has been in operation for only three-and-a-half years.

To get this condition waived off, the company had first knocked at the doors of the Insurance Regulatory and Development Authority, which directed them to the government. The company then approached the finance ministry to seek its permission. The ministry, after studying the proposal, sent it to the law ministry. It’s been almost a couple of weeks and a final word from the law ministry is still awaited. When contacted, Reliance Capital, the holding company, declined to comment anything on this issue.