Hinduja-backed IIHL completes Reliance Capital acquisition
The journey for value creation would now begin, he said, adding that the value of the Reliance Capital business on a conservative basis would be Rs 20,000 crore.;
Mr. Ashok P. Hinduja
MUMBAI: IndusInd International Holdings Ltd (IIHL) has completed the transaction to acquire debt-ridden Reliance Capital (RCAP) by transferring the entire bid amount to lenders, as per IIHL chairman Ashok Hinduja.
"The transaction from our side is over. As we are speaking, money is moving from one escrow to another," said Hinduja.
The journey for value creation would now begin, he said, adding that the value of the Reliance Capital 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, he said.
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.
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 this acquisition, the Mauritius-based IIHL intends to expand its banking, financial services, and insurance (BFSI) portfolio.
In April 2023, IIHL emerged as the successful resolution applicant by winning the bid for Reliance Capital under the Corporate Insolvency Resolution Process with an offer of Rs 9,650 crore.
Earlier this year, IIHL secured all requisite regulatory approvals from the Reserve Bank of India, the Insurance Regulatory and Development Authority of India (Irdai), and relevant stock and commodity exchanges.
Reliance Capital was placed under 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.
Hinduja also said with the acquisition, IIHL is targeting a valuation of $50 billion by 2030.
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.