The Piramal group and Zurich Insurance have decided to jointly bid for Reliance General Insurance, a subsidiary of Reliance Capital. The groups had earlier submitted separate bids for the general insurance business of bankrupt Reliance Capital.

Both Piramal and Zurich will hold 50 per cent each in the proposed special purpose vehicle (SPV). The SPV would make the bid for the company, with Rs 75 crore earmarked as deposit.

Bankers said the success of the proposed SPV in buying RGIC will mark Zurich Insurance’s entry in India’s general insurance business.

According to the indicative bids submitted at the end of August, Piramal had valued Reliance Capital’s general insurance business at Rs 3,600 crore, while Zurich Insurance had quoted an indicative bid of Rs 3,700 crore. The third bidder, Advent, had submitted the highest offer of Rs 7,000 crore for RGIC.

With the proposed joint venture, Zurich and Piramal will not compete with each other, and lead a two-horse race between Advent and Zurich-Piramal consortium.

The administrator and Committee of Creditors (COC) of Reliance Capital had appointed a global valuation expert, Willis Tower Watson, for the valuation process. This valuation is available to all the bidders and with the actuarial valuation for 100 per cent of RGIC coming at Rs 9,450 crore — higher than the indicative bids received from the bidders.

The last date for the submission of binding bids for Reliance Capital was extended to October end after all bidders sought additional time to complete due diligence. The CoC granted a four-week extension despite few bidders seeking time till January end.

Reliance Capital had received 14 non-binding bids for the company as a whole and its multiple businesses. Six companies had submitted bids for the entire company, while the other bidders had submitted bids for its multiple subsidiaries.

News Source: https://www.business-standard.com/article/companies/piramal-zurich-insurance-to-bid-jointly-for-reliance-general-insurance-122092500274_1.html