RCap’s assets get multiple suitors1 min read . Updated: 03 Dec 2020, 06:47 AM IST
- Blackstone, Bain Capital and ChrysCapital are among those who have submitted expressions of interest for Reliance General Insurance
Reliance Capital Ltd (RCap) has received preliminary bids from private equity firms, including Blackstone, Bain Capital and Oaktree, for the businesses it has put up for sale, three people aware of the development said.
Assets on the block include Reliance Capital’s general and life insurance, asset reconstruction, stockbroking, and investments in companies such as Paytm E-commerce Pvt. Ltd and Naffa Innovation Pvt. Ltd. Interested parties were allowed to bid for the entire business or a part of it.
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The last date to submit expressions of interest (EoIs) was 1 December.
The sale process is being managed by SBI Capital Markets and JM Financial Services. The asset sale was initiated by the committee of debenture holders of Reliance Capital, represented by Vistra ITCL.
According to the people cited above, who spoke on condition of anonymity, the group’s insurance businesses—Reliance General Insurance and Reliance Nippon Life Insurance Ltd—have attracted maximum interest.
Blackstone, Bain Capital and ChrysCapital are among those who have submitted expressions of interest for Reliance General Insurance. Potential suitors for Reliance Nippon Life Insurance—where Reliance Capital’s 51% stake is on sale—include Multiples Alternate Asset Management and Bain Capital, besides the holding company of a private sector bank.
Given the foreign direct investment cap of 49% in the insurance sector, it remains to be seen how these investors, especially foreign private equity funds, structure their proposed investment as they will have to partner with local firms or investors, said one of the three people cited above, adding that several domestic private equity funds have shown interest.
The insurance sector is of key interest to most private equity funds, he added.
Reliance Nippon Life Insurance has already hit the FDI cap, with Japan’s Nippon Life holding a 49% stake.
Oaktree Capital and JC Flowers and Co. are among those who have shown interest in the entire business, the people cited above said.
The company, which has been looking to monetize its assets to repay debt, said on 27 November that it has defaulted on interest payments of ₹5.48 crore to Housing Development Finance Corp. Ltd (HDFC) and Axis Bank.
Reliance Capital’s total financial indebtedness stood at ₹20,077 crore, which includes accrued interest up to 31 October.
Spokespersons for Oaktree, Blackstone, Multiples PE declined to comment.
Emails sent to other bidders remained unanswered till press time.