Debt-laden Reliance Capital garners 60 bids in asset monetisation drive

Over eight bidders have bid for entire assets on as-is-where-is basis.

Reliance Capital's (RCAP) expression of interest (EOI) for asset monetisation garnered mega response with 60 bids being received.

December 1 was the deadline for the submission of EOIs. Over 60 different bids have been received with SBI Capital Markets Limited and JM Financial Services Limited, the advisors to the lenders.

Over eight bidders have bid for entire RCAP assets on as-is-where-is basis. The prominent among them are Oaktree, J.C. Flower and multiple ARCs.

For Reliance General Insurance, which is owned 100 per cent by RCAP, there are 18 bidders and prominent among them are, Chryscap, J.C. Flower, Blackstone, KKR, CVC Capital Partners, and Bain Capital.

For Reliance Nippon Life Insurance, in which RCAP owns 51 per cent controlling stake, has received 16 bids, including Bain Capital, NIIF, Arpwood Partners, Dabur Investments, Bandhan Bank, and Multiples Asset Management among others.

For Reliance Securities, there are eight bidders, including Bain Capital, Religare Broking, Edelweiss Securities and other ARCs.

For Reliance ARC, there are six bidders, including Bain Capital, International Asset Reconstruction Company and other ARCs.

For Reliance Health, there are eight bidders - Blackstone, Bain Capital, Arpwood Partners, and other ARCs.

There are also multiple bidders for RCAP's stake in ICEX and Paytm E-commerce business.

Reliance Capital asset monetization process, to unlock value of its underlying businesses and to make RCAP debt free, was launched on October 31, 2020.

The monetization process being run under the aegis of Committee of Debenture Holders and the Debenture Trustee Vistra ITCL India Ltd - which represents 93 per cent of total outstanding debt of Reliance Capital.

EOIs were invited for all or part of RCL's stake in the following key subsidiaries and assets individually or in any combination thereof. This includes 100 per cent stake in Reliance General Insurance Company Limited (RGI). It has a paid up capital of Reliance General Insurance is Rs 252 Cr. as of September 30, 2020. It is the 4th largest Private General Insurance Company with market share of 4.5 per cent as of March 2020 in the General Insurance category. It has shown consistent growth in AUM Year-on-Year with investment book of Rs 12,315 crore as on September 30, 2020.

The company performed its best even during COVID times with Gross Direct Premium Income of Rs 4,501 crore during the first six months of FY20- 21. It has a strong distribution network of 134 branches with amongst largest agency force of 46,742 as of September 30, 2020 across the country.

Bids have been invited for 51 per cent stake in Reliance Nippon Life Insurance Company Limited (RNLI). The paid up capital of Reliance Nippon Life Insurance is Rs 1196 Cr. as of September 30, 2020. RNLI is a joint Venture with Japan's largest life insurer - Nippon Life which holds 49 per cent shareholding. It is the 10th largest Private Sector Insurer (in terms of Individual WRP) and amongst largest Non-Banca company with a network of 717 offices.

It witnessed sharp turnaround in performance during FY19-20 with a profit after tax of Rs 35 crore and 75 per cent growth (12 per cent CAGR) in embedded value over last four years.

It has an impressive claim settlement ratio of 98.1 per cent in FY19-20 and a higher Solvency ratio of 207 per cent (as against regulatory requirement of 150 per cent).

As on September 30, 2020, the AUM was Rs 21,912 crore and an individual premium market share of 2.20 per cent amongst private insurers.

Bids have been invited for 100 per cent stake in Reliance Securities Limited - Broking & distribution company offering services across asset classes including equities, commodities, derivatives, currency, mutual funds, bonds and corporate FDs.

Also on offer is a 100 oer cent stake in Reliance Financial Limited - RBI registered NBFC, engaged in the business of financing, money lending, capital market linked financing activities, 49 per cent stake in Reliance Asset Reconstruction Limited which manages portfolio of Rs 1,996 crore as on September 30, 2020.

A 20 per cent stake in Indian Commodity Exchange is also being bid. Other key shareholders in ICEX are Central Warehousing Corporation, MMTC Limited, Indiabulls Housing Finance Limited, Indian Potash Limited and Bajaj Holdings and Investments. ICEX is a SEBI regulated commodity derivatives exchange.

There is also 100 per cent stake in Reliance Health Insurance Limited. Other PE investments like Naffa Innovations Private Limited, Paytm E-Commerce Private Limited. RCL's key businesses and subsidiaries are performing well and business will continue as usual. The management, professional team, customer and partners will be unaffected by the proposed asset monetisation programme of RCAP.