Irdai restores Reliance Capital's 100% shares in Reliance General Insurance

Reliance Capital on Sunday said the Insurance Regulatory and Development Authority of India has cancelled pledge enforcement of Reliance General Insurance Company Ltd's (RGICL) shares by Credit Suisse and Nippon India MF.

Insurance regulator Irdai has directed IDBI Trusteeship Services not to give effect to any encumbrance or transfer or any change in the shareholding of RGICL, according to a BSE filing by Reliance Capital (RCAP).

Pursuant to the Irdai direction, 100 per cent shareholding in RGICL stands restored to RCAP, it added.

The regulator also said its prior approval was not taken for the transfer. The Irdai added that the unauthorised transfer also violates FDI regulations.

The Irdai action will benefit all lenders of Reliance Capital as sale proceeds of RGICL's shares will go to all lenders and not just Credit Suisse and Nippon India MF.

The sale of RGICL's shares is expected to fetch Rs 6,000 crore for RCAP lenders, which is almost 40 per cent of the total RCAP secured debt.

The 100 per cent shareholding of RGICL is held by Reliance Capital.

In November 2019, the IDBI Trusteeship had transferred RCAP's 100 per cent shareholding in RGIC by invoking pledge, which was contested by the company, RCap said in a statement.

The company will continue with its efforts to monetise its shareholding in RGICL as part of its overall plan for debt reduction, the statement added.

Anil Ambani-backed Reliance Capital delays interest payment obligation

Reliance Capital has informed the exchanges that it’s servicing of interest or principal of non-convertible debentures falling due on December 9 is delayed.

The firm in its filing to the exchanges said, CARE rating downgrading the company’s entire debt to default rating in September, despite no overdues on principal or interest payment to any lender on the part of the firm, has led to acceleration of various facilities by certain lenders.

The demand for immediate payments for the facilities availed by the firm from various lenders, which other-wise was to be paid over a phased manner.

Reliance Capital Pension's registration under NPS cancelled: PFRDA

The registration of Reliance Capital Pension Fund under the government's National Pension Scheme (NPS) has been cancelled following a request by the company, sector regulator PFRDA said in a notice.

With this, the pension fund is no longer available for subscription under NPS, said the Pension Fund Regulatory and Development Authority of India (PFRDA).

Earlier this year, the company had surrendered its NPS licence.

It was one of the eight companies registered under NPS to manage funds for subscribers from the private sector.

"This is to inform to general public that based on the request received from Reliance Capital Pension Fund Ltd, the certificate of registration granted to Reliance Capital Pension Fund Ltd has been cancelled by the Authority and the pension fund is no longer available for subscription under NPS," PFRDA said.

The other seven funds for private sector subscribers are HDFC Pension Management Co, ICICI Prudential Pension Fund Management Co, Kotak Mahindra Pension Fund, LIC Pension Fund, SBI Pension Funds, UTI Retirement Solutions, and Birla Sunlife Pension Management.

LIC Pension Fund, UTI Retirement Solutions and SBI Pension Funds manage NPS for the government employees.

NPS is a pension cum investment scheme launched by the government to provide old age security to the citizens.

There were about 1.28 NPS subscriber at end-October, 2019.

RCap's $13-bn debt at risk on default rating, revives India's credit scare

Reliance Capital Ltd.’s downgrade to default grade at Care Ratings Ltd. places the debt of embattled tycoon Anil Ambani’s conglomerate at risk, reigniting India’s credit scare.

Mumbai-based Care cut Reliance Capital’s bonds by eight notches to D from BB, citing a delay in coupon payments on several of the lender’s non-convertible debentures, the rating company said in a Sept. 20 statement. That raises the default risk on the debt of the Reliance ADAG Group, which has ballooned to about 939 billion rupees ($13 billion) at four of its biggest units.

The downgrade “will precipitate a chain sequence of events that will gravely harm the interests of millions of retail and institutional investors having direct or indirect exposure to the securities of the company,” Reliance Capital said Saturday in an exchange filing.

The default rating is set to exacerbate a yearlong credit crunch among India’s shadow lenders, which started with the collapse of IL&FS Group last year. Mumbai-based Reliance Capital has been trying to sell off assets to raise funds while its shares tumbled more than 90 per cent over the past year amid the cash squeeze.

The delay in coupon payments was caused by a “technical glitch in bank servers,” Reliance Capital said in its statement, adding that the rating company did not give the lender the opportunity to provide comments on the downgrade. Payment went through on the next working day after the delay, the shadow lender said.

Anil Ambani's Reliance Capital inches closer to exiting mutual fund biz

Anil Ambani-led Reliance Capital will sell up to 6.3 per cent stake in Reliance Nippon Life Asset Management —commonly referred to as Reliance Mutual Fund —through the offer for sale (OFS) route, on Wednesday.

The share sale is part of Reliance Capital’s deleveraging programme, which involves exiting the asset management operations, among other businesses. At present, Reliance Capital holds 32.12 per cent stake in Reliance MF.

Close to 21.5 per cent of this will be sold to Japan’s Nippon Life, which will then become the sole promoter of the fund house.

If the OFS is fully subscribed, Reliance Capital will be left with a residual stake of 4.4 per cent, which will then be sold to public investors on a later date.

Anil Ambani's Reliance Capital inches closer to exiting mutual fund biz

The floor price for the OFS has been fixed at Rs 262, which is a discount of 8.4 per cent to Reliance MF’s last close of Rs 286, on the BSE.

A total of 38.6 million shares will be sold in the OFS, of which a tenth is reserved for retail investors and will be auctioned on Thursday.

At the floor price, Reliance Capital will mop up an estimated Rs 1,012 crore. Market players say that demand for the OFS could be strong, given the attractive discount and huge traction in share prices of asset management companies. Shares of Reliance MF have rallied 80 per cent so far this year. Bigger rival HDFC MF, too, has seen a similar spurt in its share price. Last month, Nippon Life announced the conclusion of an open offer, which was triggered by the change in ownership of Reliance MF.

In the open offer, Nippon Life had acquired 10.6 per cent stake, taking its shareholding from 42.9 per cent to 53.5 per cent, as a result. The Japanese company intends to take its total stake to 75 per cent, the maximum a promoter is allowed to hold.

People with knowledge of the matter say the remaining 21.54 per cent stake will be acquired by Nippon Life from Reliance Capital soon.

Analysts say that the stock of Reliance MF has witnessed a re-rating, following the change in ownership from joint control between Reliance Capital and Nippon Life, to sole control by the latter.

The stock, however, still trades at a discount to peer HDFC AMC.

Anil Ambani's Reliance Capital ends talks with Hero Fincorp on insurer sale

Reliance Capital has called off a sale of its general insurance unit to Hero Fincorp, forcing embattled tycoon Anil Ambani to look for options as he seeks to reduce debt, people familiar with the matter said.

The talks for selling Reliance General Insurance which were at an advanced stage, ended after the shadow financier struggled to raise funds for the acquisition, said the people, asking not to be named as the information is not public. Ambani’s group is looking for alternatives for the insurance asset including reaching out to other potential buyers, the people said.

The sale of the fully-owned insurance unit is crucial for Ambani as he steps up efforts to cut his group’s debt that has ballooned to about Rs 939 billion ($13 billion) at four of its biggest units. “Reliance Group is committed to meeting all future debt obligations,” Ambani said in a rare conference call in June, and becoming “capital light, with bare minimal debt.”

A spokesman at Reliance Capital declined to comment, while a representative for Hero FinCorp didn't respond to an email and phone calls seeking comment. Hero Fincorp was in advanced talks to buy the insurer at a valuation of about Rs 60 billion ($860 million), The Economic Times reported in May, citing unnamed sources.