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Reliance Capital finally comes under Hinduja fold

IIHL completes RCap acquisition

IIHL chairman Ashok Hinduja said Reliance General Insurance and Reliance Nippon Life will go for the public listing in 2-3 years and the word ‘Reliance’ will be removed

After completing the transaction to acquire debt-ridden Reliance Capital (RCap) by transferring the entire bid amount to lenders, IndusInd International Holdings Ltd (IIHL), the new owner of the company, will stick mainly to insurance companies and most probably exit from many of the remaining small entities in the RCap group.

IIHL chairman Ashok Hinduja said Reliance General Insurance and Reliance Nippon Life will go for the public listing in 2-3 years and the word ‘Reliance’ will be removed. 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.

IIHL has reviewed whether it will keep 39-40 units of the recently acquired company. The decision will be taken by the board, Hinduja said, adding that it will exit RCap units other than insurance firms, broking and asset reconstruction business.

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After this acquisition, IIHL intends to expand its banking, financial services, and insurance (BFSI) portfolio. IIHL, a Mauritius-based investment company, is the holding company of the Hinduja Group, and is led by Ashok Hinduja.

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.

The financial services firm has 1.28 lakh employees and the new management would protect the interest of employees to the extent possible, Hinduja said.

The management transfer of RCAP is likely to take place on Wednesday. “The transaction from our side is over. As we are speaking, money is moving from one escrow to another,” Hinduja said. The value of the Reliance Capital business on a conservative basis would be Rs 20,000 crore.

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IIHL paid Rs 5,600 crore to lenders last week for the acquisition of Reliance Capital.

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.

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