Hinduja Group to acquire Reliance Capital by end-January
15 Dec 2024
Hinduja Group company IndusInd International Holdings Ltd (IIHL) said it would complete the Rs9,861-crore acquisition of debt-laden Reliance Capital (RCap) by January 2025, nearly a year after the National Company Law Tribunal (NCLT) approved the debt resolution plan for the Anil Ambani Group company.
Mauritius-based IIHL had submitted a Rs9,650-crore debt resolution proposal of RCap, and subsequently paid an additional Rs200 crore to bolster RCap’s finances.
The Rs9,650-core resolution plan consists of a Rs2,750-crore equity portion, while the remaining portion will be for debt redemption. RCap can use the equity portion for investing in new business and repayment of debt.
On the initial public offering (IPO) of RCAP, he said it can be looked at after two years of operations.
The RBI, in November 2021, superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.
The Mumbai bench of the NCLT approved IIHL’s resolution plan on 27 February 2024, and later allowed the bidder to complete the transaction latest by 31 January 2025.
The process and procedures related to the resolution plan has almost been completed and only some procedures from the administrator and the committee of creditors are remaining, which would be over soon and RCap will be in the Hinduja Group within the next 4-6 weeks, reports quoted IIHL chairman Ashok P Hinduja as saying.
On completion of the acquisition of bankrupt Reliance Capital, the Hinduja Group envisages an over three-fold increase in its banking, financial services, and insurance (BFSI) business to around Rs4,24,000 crore ($50 billion), in the next five years.
Reliance Capital, with its components, which include Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Money, Reliance Home Finance, Reliance Securities, Reliance Health Insurance, Reliance Asset Reconstruction and National Pension System, has a valuation of around Rs127,200 crore ($15 billion) as of 30 September 2024.
As per the resolution plan, the money will be handed over to RCap’s creditors once the delisting of the company’s shares is over.
IIHL also plans a rebranding of RCap over the years to align it with the IndusInd brand.
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