Piramal Enterprises is not fit to acquire Reliance Nippon Life Insurance, which is on the block as part of the debt-ridden Reliance Capital resolution process, due to the Irdai restriction. Piramal Enterprises is one of 54 Potential Requestors for Resolution (PRA) for Reliance Capital Ltd and its subsidiaries.
As per the guidelines of the Insurance Regulatory and Development Authority of India (Irdai), a promoter cannot hold a stake in more than one insurance company in the same segment. According to the provisions, an investor cannot individually hold more than 10% and jointly cannot hold more than 25% of the paid-up share capital of the insurance company.
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Bidders had two options – either they could bid for the whole of RCL or for one or more of Reliance Capital’s subsidiaries. Subsidiaries of Reliance Capital include Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance and Reliance Commercial Finance.
(Edited by : Anand Singha)
