Reliance General Insurance is set to receive ₹200 crore capital infusion from Reliance Capital with the committee of creditors approving the fresh funding last week. The capital infusion is likely to happen by August.
“Post the capital infusion by RCAP, Reliance General Insurance will raise an additional ₹400 crore Tier-2 capital to accelerate growth,” said a banking source.
Reliance General Insurance, the insurance arm of Reliance Capital, had written to the administrator of the parent company seeking ₹600 crore as capital on an “urgent basis” in order to preserve the business.
Reliance General said as a “large format insurer” it can gain significantly from the growth opportunities in the current ecosystem, like its peers, but for that, it needs adequate capital support. The capital infusion is needed to “preserve the business, enhance the value and take our solvency from about 155 per cent to about 175 per cent,” it said in the letter accessed by businessline.