In a significant development, the Reserve Bank of India (RBI) has granted its approval for the acquisition of debt-ridden Reliance Capital by IndusInd International Holdings Limited (IIHL), a subsidiary of the Hinduja Group. The approval comes after months of negotiations and legal proceedings, and paves the way for the revival of Reliance Capital, which has been under the RBI's corporate insolvency resolution process (CIRP) since 2021.
IIHL emerged as the successful bidder for Reliance Capital in the second round of the auction held in April 2023, offering a bid of Rs 9,661 crore. The company's bid was approved by the Committee of Creditors (CoC), which represents the lenders to Reliance Capital. However, the approval was challenged by some of the other bidders, leading to a delay in the RBI's final decision.
With the RBI's nod, IIHL is now expected to complete the acquisition process in the next few months. The acquisition is expected to provide much-needed relief to the lenders of Reliance Capital, who have been struggling to recover their dues since the company's financial troubles began. It is also expected to provide a lifeline to Reliance Capital, which has been struggling to stay afloat under the weight of its debt burden.
The acquisition is a major boost for the Hinduja Group, which is expanding its financial services business. IIHL is a non-banking financial company (NBFC) that is engaged in the business of lending, investment, and financial advisory services. The acquisition of Reliance Capital will give IIHL access to a large customer base and a strong brand name.
The acquisition of Reliance Capital is also a positive development for the Indian financial sector. The consolidation of the NBFC sector is expected to lead to the creation of stronger and more resilient NBFCs, which will be better able to withstand economic shocks.
The acquisition of Reliance Capital by IIHL is a significant development that is expected to have a positive impact on the Indian financial sector. The revival of Reliance Capital will provide relief to its lenders and create new opportunities for the Hinduja Group. The consolidation of the NBFC sector is also expected to lead to the creation of stronger and more resilient NBFCs.
[image credits: telegraph india]
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