Hinduja Group Receives Nod From IRDAI For Acquisition Of Reliance Capital’s 3 Insurance Firms: Report

The conglomerate got permission from the insurance regulator to complete the Reliance Capital (RCap) deal and conclude the resolution process of the debt-laden company by the deadline of May 27

The Hinduja Group reportedly received approval from the Insurance Regulatory and Development Authority of India (IRDAI) to finalise the acquisition of Reliance Capital’s three insurance firms, media reports said. 

The conglomerate got permission from the insurance regulator to complete the Reliance Capital (RCap) deal and conclude the resolution process of the debt-laden company by the deadline of May 27, reported The Financial Express. 

However, the IndusInd International Holdings (IIHL), through which the Hinduja Group placed the bids for the firms, is yet to receive regulatory approval for a proposed revision in the holding structure. The report cited sources and said that these approvals should be received ‘anytime now’.

Last Friday, the IRDAI allowed RCap’s three insurance firms, namely, Reliance General Insurance Company Ltd (RGICL), Reliance Nippon Life Insurance Co Ltd (RNLICL), and Reliance Health Insurance Ltd (RHIL) to be transferred to the Hinduja Group, the report noted.

RCap controls a 26 per cent share in the insurance firms and this stake will be transferred to Aasia Enterprises, in which Ashok P Hinduja, chairman of the conglomerate, controls a 90 per cent share. The remaining stake is divided equally between Harsha A Hinduja, trustee of the Hinduja Foundation, and Shom A Hinduja, President, Alternative Energy and Sustainability at Hinduja Group.

In its approval letter, the IRDAI has specified that the deal should adhere to the foreign direct investment rules, and RCap and Aasia Enterprises should remain as promoters of the three insurance entities. Further, the regulatory body noted that the shares of the three firms shouldn’t be encumbered.

A spokesperson from IIHL issued a confirmation and said, “The approval is subject to certain regulatory, statutory, and judicial clearances and compliances. IIHL stands committed to working towards obtaining the same as soon as possible and aims to close this transaction by the National Company Law Tribunal’s stipulated date of May 27,” the report noted.