Hinduja group, Torrent, Piramal, Oaktree bid for Reliance Capital

Aditya Birla, Nippon back out, no takers for individual insurance businesses

Hinduja group, Torrent, Piramal, Oaktree bid for Reliance Capital
The offers made by bidding companies were not yet known, said an industry source.

The Hinduja group, Oaktree, Torrent, and Piramal group with Cosmea Financial and UV ARC submitted their final bids for Reliance Capital (RCap). The deadline for final offers for the bankrupt firm closed on Monday.

UV Special Situation Fund made an offer for Reliance Capital on a fee basis, which implies that it has no resolution plan. The firm plans to sell RCap’s assets and repay lenders, as and when the sale happens.

The offers made by bidding companies were not yet known, said an industry source.

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According to industry sources, there were no separate bids for the life and general insurance ventures. Both Birla Sun Life and Nippon, which were interested in the life insurance business, backed out from the bidding process. Nippon, which has a 49% stake in the Reliance Nippon Life Insurance, had shown interest in bidding for the firm’s 51% with an Indian partner. However, it was unable to stitch together any partnership.

Similarly, Birla Sun Life Insurance backed out of the race after Nippon Life had declined a merger due to fears of its stake falling below 10%. Both Zurich Insurance and US-based private equity investor Advent International, which had submitted non-binding bids for Reliance General Insurance Company (RGIC) in the initial round, stayed away in the final round. Advent had submitted a non-binding bid of Rs 7,000 crore for RGIC during the first round of the bidding while Piramal and Zurich had quoted Rs 3,600 crore and Rs 3,700 crore, respectively.

Bidding for RCap could be done in two ways: Firstly, for the entire company, and secondly, for individual businesses. Besides RCap as a whole, the administrator had also put Reliance Nippon Life Insurance (51%), general insurance, commercial finance, home finance, securities business, Reliance ARC and others up for sale.

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According to sources, more than 50 companies had submitted their expressions of interest (EoIs) in February to bid for Reliance Capital’s assets. Of these, only a few companies submitted non-binding bids by August.

Banking sources said Torrent wants to enter the financial services sector by acquiring RCap. Piramal, which already has a significant financial services business, wants to further expand it with this acquisition.

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First published on: 30-11-2022 at 01:00:00 am