IRDAI approval is crucial for transfer of insurance businesses of Reliance Capital to IIHL
Mumbai: Insurance sector regulator IRDAI has given conditional approval to Hinduja Group firm IndusInd International Holdings Ltd (IIHL) for the takeover of debt-ridden Reliance Capital.
“We are happy to acknowledge the receipt of approval from IRDAI yesterday (May 10, 2024) on the auspicious occasion of Akshay Tritiya. The approval is subject to certain ‘regulatory, statutory, and judicial’ clearances/compliances,” an IIHL spokesperson said in a statement.
IIHL stands committed to working towards obtaining the same as soon as possible and aims to close this transaction by the NCLT’s stipulated date of May 27, 2024, the spokesperson said.
“We take this opportunity to thank all stakeholders including regulators and the administrator for their timely support,” it said.
IRDAI approval is crucial for the transfer of insurance businesses of Reliance Capital i.e. Reliance General Insurance and Reliance Nippon Life Insurance, to the IIHL. Reliance Capital is one of the promoters of Reliance General Insurance and Reliance Nippon Life Insurance.
The National Company Law Tribunal on February 27, 2024, approved Hinduja Group firm IndusInd International Holdings Ltd’s Rs9,650-crore resolution plan for Reliance Capital.
In November 2021, the Reserve Bank superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company. The central bank had appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 to take over the company.
Reliance Capital had a debt of over Rs40,000 crore, and four applicants had initially bid with resolution plans. However, the committee of creditors rejected all four plans for lower bid values and a challenge mechanism was initiated in which IIHL and Torrent Investments participated.
In June 2023, the Hinduja Group firm was selected by the committee for its bid of Rs9,661 crore upfront cash. Reliance Capital’s cash balance of an additional Rs500 crore would also go to the lenders.
