Hinduja Group firm gets Sebi nod for Reliance Wealth ownership change

Market regulator also approves application for a proposed change in control at Reliance Securities

Hinduja Group's Aasia Enterprises has got the market regulator’s approval for a change of control in Reliance Wealth Management, under rules governing investment advisers and portfolio managers.

The Securities and Exchange Board of India also approved an application for a proposed change in control at Reliance Securities under regulations governing research analysts and investment advisors. The promoter group is changing at parent Reliance Capital – from the erstwhile Anil Ambani group to the Hinduja group – following IndusInd International Holdings' (IIHL) successful bid to acquire the beleaguered financial services company.

Hinduja-led IIHL has emerged as the successful resolution applicant to acquire Reliance Capital under the Corporate Insolvency Resolution Proceedings (CIRP) process of the Insolvency and Bankruptcy Code (IBC).

The CIRP process against Reliance Capital was initiated in November 2019. IIHL's bid received support from creditors, with a 99.6 per cent majority vote. Subsequently, the National Company Law Tribunal (NCLT) approved the resolution plan in February 2024.

Reliance Capital had a secured debt of Rs 16,000 crore. According to media reports, the lenders would receive Rs 10,000 crore from IIHL, including Rs 9,661 crore in upfront cash.

The Reserve Bank of India has appointed Nageswara Rao Y as the company's administrator as per the IBC, with the Mumbai bench of the NCLT approving the resolution plan on February 27.

The terms of the Resolution Plan will be implemented by May 27, which is 90 days from the NCLT's approval. However, the 90-day period is subject to the fulfilment of certain prior conditions, which includes securing approvals from various sector regulators. According to the NCLT's order, the term of 90 days will be automatically extended to factor in the time required for the fulfilment of such conditions.

Through Reliance Capital, the Hinduja group will gain a foothold in the life, general, and health insurance businesses, alongside asset reconstruction and broking business. Reports also suggest that the group is looking to foray into the mutual fund arena and is in advanced talks to acquire a majority stake in Invesco AMC.