Lenders seek EoIs for Reliance Capital stake in insurance biz, other assets

December 1 deadline for submitting EoIs; bids also invited for its MF assets where RCap holds 49% stake

The lenders of Reliance Capital, an Anil Ambani group company, have sought expressions of interest for all its key assets including its entire stake in Reliance General Insurance Company Ltd (RGI) and 51 per cent stake in Reliance Nippon Life Insurance Company Ltd. Prospective bidders can submit EoIs for RCL also with all its assets or in combinations.

With a deadline of December 1, the EoIs have also been called for its mutual fund assets where RCL holds 49 per cent stake.

A banking source said the monetisation process is being run by the Committee of Debenture Holders and the Debenture Trustee, Vistra ITCL India Ltd – which represents 93 per cent of RCL’s Rs 15,000 crore debt. 

SBI Caps and JM Financial will run the process on behalf of the debenture holders, the source said.

“We are expecting good offers as Reliance General Insurance is the fourth largest private general insurance company with a market share of 4.5 per cent as of March this in the general insurance category,” said a banker. The company has also shown a consistent growth in AUM (asset under management) with Year-on-Year with an investment book of Rs 12,315 crore. as on September 30. 

The company performed well even during Covid times with gross direct premium income of Rs 4,501 crore. during the first six months of FY21. The company also has a strong distribution network of 134 branches with among the largest agency force of 46,742 as of September 30, 2020 across the country.

Reliance Nippon Life Insurance, on the other hand, has Japan’s largest life insurer--Nippon Life which holds 49 per cent shareholding in the company. The company is the tenth largest private sector insurer and among the largest non-bank companies with a network of 717 offices.

The company has seen a 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 the last four years, he said. The company has 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)

The firm will also sell 100 per cent stake in Reliance Securities Ltd, a broking & distribution company offering services across asset classes such as equities, commodities, derivatives, currency, mutual funds, bonds & corporate FDs.

The company’s 100 per cent stake in Reliance Financial Limited, an RBI-registered NBFC, and 49 per cent stake in Reliance Asset Reconstruction Limited will also be offered to prospective buyers.

The EoIs for 20 per cent stake in Indian Commodity Exchange (ICEX) and 100 per cent stake in Reliance Health Insurance Limited are also invited.  Other PE investments like Naffa Innovations Private Limited, Paytm  E-Commerce Private Limited are also for sale.