The bankruptcy court NCLT Mumbai approved IndusInd International Holdings' resolution plan for acquiring Reliance Capital in February. Notably, the Hinduja Group entity submitted its ₹9,650 crore bid for the company just 24 hours after the auction deadline in December 2022.
To close the acquisition, IndusInd International Holdings (IIHL) is raising funds through a non-convertible debenture (NCD) issue. IIHL requested a 90-day extension beyond the original deadline of May 27, 2024, to arrange necessary regulatory approvals and secure funding. The debt includes both domestic market sources and global private credit funds.
As of the March 2024 quarter, Anil Ambani's family remains listed as promoters in the Reliance Group company. Anil Ambani himself holds no shares, while his wife Tina owns 2,63,474 shares, and their son Jai Anmol Ambani holds 28,487 Reliance Capital stocks.
Reliance Capital is currently undergoing the corporate insolvency resolution process, with Nageswara Rao Y appointed as administrator by the Reserve Bank of India under the Insolvency and Bankruptcy Code, 2016.
The acquisition includes taking over Reliance Capital's insurance arms: wholly-owned subsidiary Reliance General Insurance and the 51:49 joint venture with Nippon Life, known as Reliance Nippon Life Insurance.
The National Company Law Tribunal (NCLT) approved IIHL's ₹9,650 crore resolution plan for Reliance Capital. The implementation is pending approval from the Reserve Bank of India (RBI) for the proposed corporate restructuring of implementing entities.
Reliance Capital had a debt of over ₹40,000 crore. IIHL's bid of ₹9,661 crore upfront cash was selected by the committee of creditors. Additionally, Reliance Capital's cash balance of an extra ₹500 crore will go to the lenders.
The acquisition has received approvals from banking and capital markets regulators, as well as the Competition Commission of India (CCI). However, the IRDAI expressed certain concerns, including potential violations of foreign direct investment caps in insurance companies and reliance on borrowings for the acquisition.
Overall, the acquisition process is progressing, subject to regulatory clearances and compliance.
Besides Reliance Capital, an another Anil Ambani led company, Reliance Naval and Engineering (RNEL), was taken over by Mumbai-headquartered business house Swan Group's Swan Energy Limited, in January this year. Swan Energy acquired erstwhile Anil Ambani group company Reliance Naval & Engineering (RNEL), in December 2022.
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