While Mukesh Ambani is India’s richest man, and his Asian and world rankings have been consistently moving upward, younger brother Anil Ambani’s fortunes continue to be in dire straits with his group of companies posting losses and battling bankruptcies.
In the latest development, prominent corporate houses in India and abroad have shown interest in bidding for Reliance Capital, a shadow banking cum insurance firm that has been facing insolvency. The Reserve Bank of India last year superseded the Reliance Capital board following numerous payment defaults and governance issues.
Reliance Capital subsidiaries include Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company and Reliance Home Finance.
About 14 firms have expressed an interest in bidding for Reliance Capital. The prominent ones include Adani Finserve, Blackstone, KKR, Nippon Life, Brookefield, Oaktree and Piramal Finance. While some firms are keen to buy the entire company, others are looking at picking up some of its eight subsidiaries.
After taking over the Reliance Capital board on November 29 last year, the central bank appointed ex-banker Nageswara Rao Y as the administrator to oversee the corporate insolvency resolution process. The Reserve Bank filed an application for initiation of insolvency at the National Company Law Tribunal.
Last week the administrator extended the deadline for submissions of expression of interest to March 25, possibly at the request of some prospective bidders, the Press Trust of India reported. Rao invited expressions of interest for the sale of Reliance Capital in February.
In September last year, Reliance Capital informed shareholders that the company’s consolidated debt was 400 billion rupees. It later reported narrowing its consolidated net loss to 17.59 billion rupees in the quarter ended December 2021, from 39.66 billion rupees in the same period last year.
This is the third major shadow banker against which the central bank initiated bankruptcy proceedings in recent times. The other two were Srei Group NBFC and Dewan Housing Finance Corporation.
As for Anil Ambani, his personal fortune has dwindled over the years as his businesses sank under the weight of debt. In 2006, the two brothers divided father Dhirubhai Ambani’s business empire.
In 2007, Anil Ambani had a net worth of $45 billion, according to the Forbes Rich List, while Mukesh Ambani had a net worth of $49 billion.
Mukesh Ambani is now worth about $90 billion, while Anil recently declared his net worth was zero after being prodded by Chinese bankers to return their money. His group companies Reliance Infrastructure, Reliance Communications and Reliance Power are struggling to pay off debts.