Anil Ambani's Company Reliance Capital Can Be Divided Into 4 Parts

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Anil Ambani's Company Reliance Capital Can Be Divided Into 4 Parts
22 Oct 2022
5 min read

News Synopsis

The structure of Anil Ambani's company Reliance Capital, which is heavily in debt, can change completely. Actually, the company's administrator has proposed to divide it into four parts. Reliance Capital is currently going through an insolvency process. For this, the trading of shares has been closed for the last month.

According to media reports, the bidding process for Reliance Capital is already in the final stages. Four companies Piramal, Zurich, Advent Private Equity, and Aditya Birla Capital are on the buy list for the debt-ridden company's general insurance and life insurance ventures.

The company's administrator has written to the RBI seeking its opinion or approval on the proposal. Under the extant rules of RBI, not more than one CIC is allowed in a company. Therefore, the reconstruction of the four CICs into Reliance Capital CIC would require RBI's nod.

The proposed four CICs are Reliance General Insurance Company (RGIC), Reliance Nippon Life Insurance Company (RNLIC), RCAP's other businesses, including Reliance Securities, ARC, Private Equity, Investment Real Estate, Reliance Commercial Finance, and Reliance Home Finance.

According to RBI regulations, an NBFC conducts the business of "acquisition of shares and securities and holds not less than 90 percent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies."

On November 29, 2021, the RBI replaced the RCL board after major governance problems and payment defaults. The RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital in February 2022.

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