IndusInd International Holdings chairman Ashok Hinduja on Tuesday announced the acquisition of Reliance Capital, completing the three-year-long resolution process of the debt-ridden company.
Photograph: Prashant Waydande/Reuters
IndusInd International Holdings Ltd (IIHL) has transferred the bid amount to the escrow account of the lender, and the takeover of the management from the Administrator will happen on Wednesday.
Mauritius-based IIHL emerged as the successful suitor with a bid of Rs 9,650 crore for the resolution of Reliance Capital (RCAP).
Later, the company paid Rs 200 crore to bolster RCAP’s solvency, which was over and above the bid amount.
“The transaction from our side is over. We have worked on this deal for three years.
“As we are speaking, money is moving from one escrow to another,” Hinduja said while addressing the media in Mumbai.
The journey for value creation would now begin, he said, adding that the value of Reliance Capital’s insurance business on a conservative basis would be Rs 20,000 crore.
IIHL would complete the review of the entire RCAP business and take a call on the fund infusion required, Hinduja said.
Till the business meets value creation requirements, he said, capital infusion would not be an issue.
With regard to subsidiaries, he said there are about 39-40 entities of Reliance Capital and the new management would divest many of them as they are mostly small shell entities with small businesses.
Broking and Asset Reconstruction business will be retained by the new management.
RCAP, registered as a core investment company with the RBI, has several entities, including Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Money, Reliance Securities, Reliance Asset Reconstruction, and Reliance Commercial Finance.
Asked about the listing of insurance companies, Hinduja said it may happen after two years of value creation.
The financial services firm has 1.28 lakh employees and the new management would protect the interest of employees to the extent possible, he assured.
With regard to branding, he said, “For three years, we can continue with the same name as per the NCLT approval but we are keen to promote the IndusInd brand and professional agencies are working on blending the brand for campaign post-acquisition.”
The blending of IndusInd band may take place over 6-9 months, he added.
With the acquisition of RCAP, he said IndusInd International Holdings Ltd (IIHL) is targeting a valuation of $50 billion by 2030.
Citing the latest NCLT direction, he said it advised all parties to complete procedural issues for the ownership transfer to IIHL by March 20.
The National Company Law Tribunal, in its last hearing, had asked all parties to ensure completion of the implementation process by March 20 while posting the matter for further hearing on March 25, 2025.
In April 2023, IIHL emerged as the successful resolution applicant by winning the bid for Reliance Capital under the Corporate Insolvency Resolution Process (CIRP) with an offer of Rs 9,650 crore.
Last year, IIHL secured all requisite regulatory approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (Irdai), and relevant stock and commodity exchanges.
Reliance Capital was placed under the RBI-appointed administration in November 2021 due to governance lapses and payment defaults associated with the Anil Dhirubhai Ambani Group.
The central bank appointed Nageswara Rao Y as the administrator, who subsequently invited bids for the company’s takeover in February 2022.
