Tata AIG and ICICI Lombard have joined the race to buy Reliance Capital’s insurance units.
According to insiders, Adani Finserve, ICICI Lombard, Tata AIG, HDFC Ergo, and Nippon Life Insurance are in the thick of the 54 major companies interested in buying debt-ridden Reliance Capital Ltd., which is pushed by the Anil Ambani Group. The Reserve Bank of India specified that the administrator had extended the deadline for offers that are deferring for the debt-ridden corporation from March 11 to March 25.
Reliance Capital is headed by Anil Ambani, the promoter of the Reliance Group, with Amitabh Jhunjhunwala (Vice-Chairman) and Anmol Ambani ( Executive Director). Dhirajlal Hirachand Ambani, well recognized as Dhirubhai Ambani, was an Indian business magnate who founded Reliance Industries. He was born on December 28, 1932, and died on July 6, 2002. Ambani took Reliance public in 1977 and died in 2002 with a net worth of 7.9 billion dollars. For his services to trade and industry, he was posthumously awarded the Padma Vibhushan, India’s second-highest civilian honor, in 2016.
The Reliance Anil Dhirubhai Ambani Group owns Reliance Capital Limited, an Indian diversified financial service holding company. The Reliance Group includes Reliance Capital, which is an element of the Nifty Midcap 50 and the MSCI Global Small Cap Index. It is one of India’s largest and most valued private-sector financial service providing firms. The company’s net value was Rs. 16,548 crores till the 31st of March, 2017, while its overall benefits were Rs. 82,209 crores. In the 2018 Fortune India 500, Reliance Capital was set as India’s 77th largest corporation, with a 5th place end in the ‘Non-Banking Finance’ category.
In 1986, Reliance Capital Limited was established. Reliance Capital & Finance Trust Limited was established in Ahmedabad, Gujarat. The company was renamed Reliance Capital on January 5, 1995. In 2002, Reliance Capital Ltd. relocated its headquarters to Jamnagar, Gujarat, before settling in Mumbai, Maharashtra, in 2006. In 2006, Reliance Capital Ventures Limited and Reliance Capital merged to form Reliance Capital. As a result of the transaction, Reliance’s shareholder base expanded from 0.15 million to 1.3 million.
Reliance Capital first entered the capital market in 1990 with a public offering and has since, expanded its capital market presence through rights and public offerings. The Ahmedabad Stock Exchange and the Stock Exchange of Mumbai were the first to list.
Asset management, mutual funds, life insurance, and general insurance are among Reliance Capital’s businesses, as are commercial finance, home finance, stockbroking, wealth management services, financial product distribution, private equity, asset reconstruction, proprietary investments, and other financial services. As of May 1, 2017, the company has over 20 million clients and employed roughly 15,595 people across India.
Reliance Capital sold a 26 percent stake in its life insurance business, Reliance Life Insurance, to Nippon Life Insurance, one of the world’s largest life insurers with over $600 billion in AUM, in 2011. Reliance Life Insurance was valued at $2.6 billion after the sale was concluded for Rs. 3,082 crores for a 26 percent interest. Nippon Life Insurance paid Rs. 1,450 crores for a 26 percent stake in Reliance Capital Asset Management in 2012.
According to reports, Reliance Capital also intends to sell a 26 percent stake in its general insurance subsidiary, Reliance General Insurance, at a suitable moment. According to the Economic Times, India’s largest financial newspaper, “Because Reliance General Insurance is a market leader with an 8.4 percent market share, the proposed stake sale is projected to yield significant capital gains for Reliance Capital aside from deleveraging the balance sheet, the continuing restructure should assist Reliance Capital in conserving capital and generating improved return ratios.” In July 2014, Reliance Capital announced the merger of its global film and media services company with Prime Focus, resulting in a combined turnover of over Rs 1,800 crore.
Reliance Capital provides a variety of financial services across a wide range of industries. With interests ranging from asset management, insurance, commercial finance, broking, private equity, and other specialist financial services, the company is one of India’s most diversified financial services firms. These are:
Commercial Finance from Reliance
Reliance Commercial Finance is one of the most prominent leaders in India’s non-banking finance sector. Devang Mody is the company’s CEO and Executive Director. As of March 2017, the company had an operational presence in over 44 locations in India and an AUM of 16759 Cr. Reliance Commercial Finance provides a wide range of products, including business growth loans, property loans, vehicle loans, construction equipment loans, infrastructure loans, microfinance loans, and agriculture loans. As of 31 March 2017, the company had a loan book of 124.36 billion (US$2.1 billion), with approximately 268,278 customers (including microfinance) across India.
Reliance General Insurance Firm Limited
It is an insurance company in India that is a subsidiary of Reliance Capital Ltd. With over 24,500 agents, the company has a 7.3 percent market share in the private sector and the largest agency channel. Rakesh Jain is the CEO and Executive Director. By forming alliances with large institutions, the company has expanded and diversified its distribution network.
Reliance General Insurance participates actively in many government crop insurance programs, notably the Pradhan Mantri Fasal Bima Yojna, and has covered over 3 million farmers as part of this financial inclusion initiative. For the fiscal year ending March 31, 2017, the total gross written premium (GWP) was 40.07 billion (US$530 million). Reliance General Insurance (RGI) provides auto, health, home, property, travel, marine, business, and life insurance.
Reliance Health Insurance
Its CEO and Executive Director are Ravi Vishwanath. Reliance Health Insurance is an independent health insurance company that is completely promoted by Reliance Capital. It was founded on May 7, 2017. The company was founded on December 10, 2018, and is headquartered in Mumbai, Maharashtra.
Reliance Capital’s broking and distribution business
Reliance Securities, Reliance Capital’s broking and distribution business, is one of India’s biggest retail brokerage houses. B Gopkumar is the CEO and Executive Director of the company’s brokerage and distribution division. In India, the distribution industry has about 80 locations.
Reliance Asset Reconstruction
Reliance Asset Reconstruction is an asset reconstruction firm with Reliance Group as its primary sponsor and stakeholder (through Reliance Capital). As of March 31, 2017, the AUM was Rs. 1,829 crores.
Corporations and individuals are insured by Tata AIG General Insurance Company, which began operations in India on January 22, 2001, and offers a diversity of products of general insurance, like car, home, personal accident, travel, energy, marine, property, and specialized financial lines, along with specialized financial lines. Agents, brokers, banks, and direct channels like telemarketing, internet marketing, and worksite are all accessible for the company’s products. It is a joint venture between the Tata Group and the American International Group that provides general insurance in India (AIG).
The Tata Group owns about seventy-four percent of the insurance company, while AIG owns the remaining 26%. The Tata Group and American International Group, Inc. have partnered to form Tata AIG General Insurance Company Limited (Tata AIG General) (AIG). This joint venture began operations in India on January 22, 2001. The organization also offers motor insurance, as well as corporate and personal insurance.
The company provides general insurance. Energy, Marine, Property, and specialized financial coverage are all included in the business sector. The consumer insurance service provides a wide range of general insurance products, including auto, personal accident, casualty, home, health, and travel insurance.
In 2019, Indian Bank partnered with the company to offer the latter’s diverse range of general insurance policies to the bank’s customers for the benefit of protection, wealth creation, and savings. According to the agreement, Tata AIG General Insurance will work with the bank for sales training, product support, and ensuring smooth operational processes.
In 2020, the firm unveiled Tata AIG Tara, an insurance service via WhatsApp that, with the help of artificial intelligence, will provide consumers with a variety of answers to their policy-related concerns in a quick, efficient, and exact manner.
Customers will be able to access their policies in a virtual form, obtain policy documents, request and receive renewal information, pay premiums online, seek assistance with claims, locate network hospitals and garages, change their address or any other personal information, and use it as a forum to purchase a health or motor policy of their choice. Mumbai, where the company’s headquarters are located. More than 160 locations are served by the company.
In 2020, the firm introduced a new policy dubbed ‘AutoSafe,’ which provides private automobile owners with usage-based insurance coverage, lowering overall premium payments. The app assists policyholders in saving money on premiums by allowing them to select the number of kilometers driven, promoting safe driving, and serving as an anti-theft device, as it includes a GPS-based tracking facility and employs a telematics-based next-generation application system. It also serves as a device to track the usage of the car and determine the premium amount.
The app aids in the tracking of the vehicle’s distance traveled speed, and other driving-related features, as well as providing extra kilometers for efficient driving practices at the time of renewal and is available on all policies offering personal accidental cover up to Rs. 15 lakh for both the owner and the driver.
The app will assist Policyholders in taking advantage of flexible kilometer-based premiums by promoting savings. Policyholders can choose between 2,500, 5,000, 7500, 10,000, 15,000, and 20,000 kilometers, with a top-up km option of 500 to 1,500 km if all the kilometers are used up within the policy period.
The policyholder can also choose between monthly or annual payout options, and the guaranteed income starts from the 6th policy year for a period ranging from 20 to 45 years, and they can choose between a premium payment term of 5-12 years, and a single premium payment option allows them to choose Joint Life coverage, which ensures that the policy continues even if one of them passes away.
It also has an inbuilt Return of Premium benefit, which allows the policyholder can receive the total premiums paid (minus loading for modal premiums and discounts) when the income Period has ended.
In 2021, the company introduced Tata AIA Life Fortune Guarantee Plus, a flexible, non-linked, non-participating savings plan that provides policyholders with guaranteed long-term income as well as a comprehensive protection cover. In addition to providing long-term guaranteed income for future financial needs, the plan also provides health protection in the event that the policyholder is diagnosed with a critical disease.
This scheme provides two income options: regular income or regular income with an inbuilt Critical Illness benefit, which waives all future premiums if the insured is diagnosed with a Critical Illness during the premium payment term and provides a guaranteed minimum income, allowing the policyholder to focus on his health recovery rather than worrying about his income.
Tata AIG General Insurance currently offers a comprehensive variety of insurance products, including health, motor, travel, home, and lifestyle insurance, as well as other specialized products. Each of the company’s products is supported by expertise and unrivaled claim services. Tata AIG General Insurance is providing high-end insurance solutions to take advantage of growing retail and commercial prospects.
Tata AIG General Insurance Company began operations in 2001 and now offers a variety of insurance products to fulfill the needs of both individuals and businesses. Tata AIG General Insurance has worked to provide high-end value to consumers by providing excellent insurance products and services since its foundation.
Claims Awards Asia 2013 awarded Tata AIG General Insurance the “General Insurer Claims Team of the Year” honor. The award was granted to Tata AIG Insurance for going above and above in resolving insurance claims and striving to assist clients during difficult times. The firm was lauded for its speedy settlements, improved fraud detection systems, and excellent client satisfaction.
Tata AIG General Insurance aspires to be India’s most desired General Insurance provider. It also aspires to be the greatest general insurance provider in the industry by providing exceptional products and services to its clients, stakeholders, and business partners. The goal is to keep all of their activities transparent, fair, and consistent.
Paliwal will collaborate closely with the product team to build up and grow the insurance product range. Chetan Paliwal has been named vice-president of insurance products at employee benefits and insurance platform Pazcare. He comes to the firm from ICICI Lombard, where he held numerous roles and responsibilities in several underwriting areas, including establishing new products in various corporate product segments within the property and casualty insurance segment.
The deadline for submitting the EOI was originally set for March 11, but it was extended after certain potential bidders requested it. The vast majority of bidders that submitted EOIs, according to sources, bid for the entire company. Others have made offers for one or more of Reliance Capital’s subsidiaries. Bidders had two options: they could bid for the entire RCL or any one or more than one of Reliance Capital’s subsidiaries.
Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance, and Reliance Commercial Finance are all subsidiaries of Reliance Capital.
Yes Bank, Bandhan Financial Holdings, Cholamandam Investment, OakTree Capital, Blackstone, Brookfield, TPG, KKR, Piramal Finance, and Poonawala Finance are the other bids, according to sources. Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance, and Reliance Commercial Finance are all subsidiaries of Reliance Capital.
This is the 3rd eminent non-banking financial firm (NBFC) against whom the central bank has lately filed for bankruptcy under the Insolvency and Bankruptcy Code (IBC). Srei Group NBFC and Dewan Housing Finance Corporation were the other two (DHFL). Following that, the RBI filed an application with the National Company Law Tribunal’s Mumbai bench to initiate CIRP against the company (NCLT).
RCL told shareholders at its AGM i.e. Annual General Meeting in September that the combined debt of the company was Rs. 40,000 crore. In the quarter ending December 2021, it reported a reduction in its combined net loss to Rs. 1,759 crore.
In the same quarter a year before, the company reported a net loss of Rs. 3,966 crore. The net loss, increased from Rs. 1,156 crore in the earlier quarter ending September 2021. The company’s total income was Rs. 4,083 crore in Q3FY22, down from Rs. 4,890 crore in Q3FY21. The Reserve Bank of India (RBI) replaced the BOD i.e. board of directors of reliance capital in November and named the administrator of the company. Following that, the RBI filed an application with the National Company Law Tribunal’s Mumbai bench to initiate a corporate insolvency resolution process against the company (NCLT).