Reliance Capital infuses ₹200 crore in Reliance General Insurance

Reliance General Insurance has raised ₹200 crore as equity capital from promoter Reliance Capital in order to bolster its financial strength and seize emerging opportunities in the general insurance sector.

Shareholders of the general insurer approve the capital infusion, by way of issue of equity shares on a private placement basis, at the extraordinary general meeting on July 29.

“This capital infusion is aimed at pursuing new business opportunities for growth and securing the company’s position amongst the market leaders,” it said in a release, adding that it will also help enhance the solvency margin, reflecting its resilience in managing risks and instilling confidence among customers and stakeholders.

There will be significant impetus on achieving strategic objectives, enabling the company to capitalise on emerging opportunities in the insurance sector, expanding product offerings and reaching new customers through innovative initiatives, it said.

Reliance General had twice in December 2022 and February 2023 sought urgent capital infusion of ₹600 crore to preserve and grow the business, enhance its value and improve solvency, even as parent Reliance Capital was undergoing insolvency proceedings.

The company had in February said that capital from existing stakeholders will send a strong message of promoter support to the market, allow the company to outperform the market growth rate and increase regulatory comfort.

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“This strategic decision is a testament to our commitment to staying at the forefront of the industry and delivering superior value to our customers,” MD and CEO Rakesh Jain said, adding that the insurer is excited about the positive impact of this capital raise on its growth trajectory and ability to serve customers.

Reliance General offers motor, health, travel and home insurance. It has a network of over 9,100 hospitals, more than 90,000 intermediaries and 130 branch offices to cater to retail, corporates, and SME clients.

The committee of creditors of Reliance Capital, in June 2023, approved the Hinduja’s Group ₹9,661 crore bid for Reliance Capital, which includes a proposal to infuse ₹300 crore in the wholly-owned general insurance subsidiary. The resolution is awaiting the approval of the NCLT.