Aditya Birla Capital gets nod to bid for Reliance Nippon Life Insurance

The Committee of Creditors (CoC) of Reliance Capital has approved a proposal by Aditya Birla Capital to bid for Reliance Nippon Life Insurance Company, a firm that did not get any bids in the ongoing insolvency process.

The move would pave way for faster closure of Reliance Capital’s ongoing bankruptcy process as the current deadline to submit binding bids ends on October 31.

Earlier, a valuer appointed by the administrator for Reliance Capital’s insolvency proceedings had pegged the embedded value of the life insurance company at Rs 5,800 crore.

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The approvals were accorded following the CoC meeting held last week, sources close to the development said.

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The current deadline to submit binding bids ends on October 31, and the timeline to file the final resolution plan for Reliance Capital before the National Company Law Tribunal’s (NCLT) Mumbai bench ends on November 1.

Gujarat-based Torrent Group — which has presence in pharmaceuticals, power and city gas distribution — had earlier partnered with Nippon Life Insurance to bid for Reliance Capital’s 51% stake in Reliance Nippon Life Insurance Company.

Reliance Capital holds a 51% stake in Reliance Nippon Life Insurance, and the remaining is held by Japan’s Nippon Life.

The private sector insurer had recorded a total premium of Rs 5,037 crore for financial year FY22, as against Rs 4,736 crore posted during the year-ago period.

On November 29, 2021, RBI had superseded Reliance Capital’s board following payment defaults and governance issues, and appointed Nageswara Rao Y as the administrator for its bankruptcy process.

Reliance Nippon Life Insurance, a Reliance Capital group company, was put under option-2, while the remaining assets of were put under option-1.

While Reliance Nippon Life Insurance had not got bids during the earlier bidding process, the remaining businesses of Reliance Capital received 14 non-binding bids.

Torrent Group was among the companies that had submitted bids for Reliance Capital’s assets under option-1.