IIHL to acquire Reliance Capital by Feb 26, meeting scheduled for Tuesday

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IndusInd International Holdings Limited (IIHL) is set to acquire the debt-ridden Reliance Capital by February 26 as the National Company Law Tribunal (NCLT) on Monday accepted the acquiring company's request.

During the hearing, sources said, IIHL confirmed submission of all definitive documents and achieving financial closure towards implementation of the resolution plan of Reliance Capital.

NCLT has accepted IIHL's plea for achieving closure by February 26, 2025 in the hearing earlier in the day.

Consequently, the next hearing in the matter is scheduled on February 26 for final closure of implementation of approved resolution plan and handing over the control of Reliance Capital and its subsidiaries to IIHL.

IIHL's lenders have reassured that they are ready to draw down the remaining funds of Rs 4,300 crore required to complete the payment of total Rs 9,861 crore of resolution plan value to creditors of Reliance Capital Ltd (RCL), sources said.

IIHL has already completed more than 58 per cent of the resolution plan value (of Rs 5,750 crore) by deposit in various escrow accounts -- two of which are in CoC-designated accounts as per the order of the NCLT holding Rs 2,750 crore.

As part of the funding exercise, IIHL has submitted a set of nearly 20 documents to the administrator to be placed and approved at the monitoring committee of RCL.

As next steps, sources said, the administrator has to call for the meeting of the monitoring committee on Tuesday so that the documents for financing can be executed and the drawdown of funds can be initiated towards the target closure date.

With the acquisition, IIHL aims to ramp up banking, financial services, and insurance (BFSI) business more than three-fold to USD 50 billion in the next five years as against the current valuation of USD 15 billion (as on September 30, 2024).

IIHL had already secured approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (Irdai), and stock and commodity exchanges earlier this year.

It emerged as the successful resolution applicant in April 2023 for acquiring the troubled financial services firm under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code (IBC). The company won the bid at Rs 9,650 crore in April 2023.

In November 2021, the RBI superseded the Reliance Capital board on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.

The central bank had appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 to take over the company.