IRDAI approves Hinduja’s acquisition of Reliance Capital's insurance businesses

13 May 2024 , 12:28 PM

Insurance regulator IRDAI has approved the Hinduja Group’s acquisition of Reliance Capital’s life, general, and health insurance businesses on the condition that it does not pledge shares in the companies.

The Hinduja Group has still to get approval from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI) for the transaction to be completed, according to the persons. The IRDAI issued its clearance on Friday evening, adding that “the insurer’s shares shall not be pledged or encumbered” without the regulator’s approval, according to one of the people mentioned.

The Hinduja Group verified that it had received the regulator’s approval. “We are pleased to announce that we received permission from the Insurance Regulatory and Development Authority of India (IRDAI) yesterday on the auspicious occasion of Akshay Tritiya. The approval is subject to certain ‘regulatory, statutory, and judicial’ clearances/compliances,” sources said.

IIHL is dedicated to promptly securing the necessary approvals and intends to finalize the transaction by the deadline set by the NCLT, which is May 27th. The NCLT has granted approval to a resolution plan worth ₹9,661 Crore proposed by the Hinduja Group’s IndusInd International Holdings Ltd.

The court ordered IIHL to make the money by May 27, subject to all requisite approvals. Furthermore, the Hinduja Group business would be compelled to pay an additional ₹211 Crore to lenders, which will be deducted from the capital infused by them in Reliance General Insurance to maintain its solvency buffer.

According to the plan, IIHL would form a subsidiary, IIHL BFSI Holdings (Mauritius), in which it will own 51% and other group companies will own the other 49%. IIHL BFSI (Mauritius) will establish a 100% subsidiary, IIHL BFSI (India) Ltd, which will own a 100% interest in Reliance Capital, a former Anil Ambani company.

“These changes in the holding structure will necessitate a fresh approval from the RBI from the fit and proper point of view,” stated reports. Reliance Capital will own 74% of Reliance General Insurance and Reliance Health Insurance, with the remaining 26% held by Aasia Enterprise, a Hinduja company. In the case of Reliance Nippon Life Insurance, Aasia Enterprise will own 26% and Reliance Capital will keep 25%.

For feedback and suggestions, write to us at [e-mail]

For opening a demat account click on: https://www.indiainfoline.com/

 

For doing stock trading & investments, go to: https://ttweb.indiainfoline.com/trade/Login.aspx

 

For loans, go to: https://www.iifl.com/