Reliance General Insurance urgently seeks Rs 600 crores capital infusion from Reliance Capital
Reliance General Insurance Company Ltd. (RGICL) has sought Rs 600 crores capital infusion from Reliance Capital on an urgent basis.
In a letter to the Reliance Capital Administrator, Reliance General Insurance has sought Rs 600 crores capital support from the Reliance Capital by 31 December 2022.
The Committee of Creditors (COC) is expected to consider and discuss the request of Reliance General Insurance for capital infusion in the meeting on 9 December 2022.
The company has said that the fund infusion is essential to preserve the business, enhance the value and take the company’s solvency from 155% to about 175%.
The company says that borderline solvency is creating business hesitation in corporate clients, Government business tenders, and key retail and bank partnerships.
Reliance General Insurance believes that the capital infusion from the existing stakeholders of the company will send a strong message of support to the market, and will allow it to outperform the market growth rate.
It will also augment value creation and negate the risk of underperforming the broader markets.
The company believes that fresh fund infusion will not only increase regulatory comfort at IRDAI but will also reflect continued support by the promoter company.
The company has told the Reliance Capital administrator that as a large format insurer it can gain significantly in the current ecosystem if it can pursue growth like most of its peer competitors, but that would require adequate capital support from the Reliance Capital.
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