SEBI clarifies Bajaj Finserv's deal with Allianz SE was a related party transaction, requires shareholder approval

Bajaj Finserv had approached SEBI for guidance on whether transactions between BAGIC and Allianz SE would qualify as related party transactions.

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26 Aug, 2025 12:21

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The Securities and Exchange Board of India (SEBI) clarified on 11 October 2024 that the reinsurance agreement between Bajaj Finserv’s unit, Bajaj Allianz General Insurance Company (BAGIC), and Allianz SE qualifies as a related party transaction. SEBI said that Bajaj Finserv was required to seek shareholder approval and make disclosures under the Listing Obligations and Disclosure Requirements (LODR) regulations.

Unlisted subsidiary’s related also holding firm's related party

Bajaj Finserv had approached SEBI for guidance on whether transactions between BAGIC and Allianz SE would qualify as related party transactions under SEBI’s regulations. BAGIC is a material unlisted subsidiary of Bajaj Finserv, which holds 74 percent of its equity share capital. Allianz SE holds the remaining 26 percent.

In its submission to SEBI in July 2023, Bajaj Finserv said that Allianz SE, a shareholder in BAGIC, is not considered a related party to Bajaj Finserv, but is a related party to BAGIC.

However, SEBI clarified that transactions between an unlisted subsidiary like BAGIC and a related party of that subsidiary such as Allianz SE would still qualify as a related party transaction under the LODR regulations.

Related party transactions require shareholder approval

SEBI further noted that any material related party transaction involving a subsidiary must receive prior approval from the shareholders of the listed holding company. It added that transactions between a subsidiary and the related party of either the subsidiary or the holding listed company fall under the definition of related party transactions, and Bajaj Finserv must ensure compliance with these regulations.

Regarding the reinsurance treaty between BAGIC and Allianz SE, which was part of Bajaj Finserv’s ordinary business course, SEBI confirmed that the treaty involved the transfer of resources and must be treated as a related party transaction.

The guidance provided is based solely on the specific facts presented by Bajaj Finserv, said SEBI, adding that different conditions might lead to varying interpretations. Additionally, the letter does not represent a binding decision from SEBI but serves as a view from its Corporation Finance Department.