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The National Company Law Tribunal (NCLT) has instructed IndusInd International Holdings Ltd (IIHL) to finalise the acquisition of Reliance Capital (RCap) and deposit INR 2,750 crore towards equity investment. This directive follows IIHL's failure to meet the earlier deadline of February 25 due to pending documentation. IIHL's counsel assured that previous issues had been resolved and requested an extension, which the tribunal granted. The deal is part of the corporate insolvency resolution process initiated against Reliance Capital after governance issues and a INR 40,000 crore debt default. IIHL had previously secured regulatory approvals and aims to expand its banking and financial services to USD 50 billion in five years post-acquisition.
The National Company Law Tribunal (NCLT) has directed IndusInd International Holdings Ltd (IIHL) to complete the acquisition of Reliance Capital (RCap) by March 12 and deposit INR 2,750 crore towards the equity investment it had committed to the financial services firm's account. Advertisement
This ruling from the Mumbai bench of the NCLT follows the Hinduja Group-owned IIHL missing the previous deadline of February 25 to finalise its acquisition of Reliance Capital. IIHL's legal representative informed the court that the transaction remained incomplete due to pending documentation but was nearing closure.
IIHL's counsel, Abhishek Manu Singhvi, conveyed to the tribunal that previous challenges related to transferring equity funds into the escrow account had been addressed. He requested an additional 10 days to complete the acquisition. The court granted this extension and scheduled the next hearing for March 12.
Corporate insolvency resolution proceedings were initiated against Reliance Capital in 2021 following the Reserve Bank of India's intervention due to governance concerns and a INR 40,000 crore debt default by the firm. The central bank had appointed Nageswara Rao Y as the administrator, who subsequently invited bids in February 2022 for the company's takeover.
In 2023, its creditors had approved IIHL's resolution plan of INR 9,650 crore for the company, which received the NCLT's approval in February 2024. According to the NCLT order, IIHL had to pay the equity component of Rs 2,750 crore of the offer. NCLT directed IIHL to disclose the term sheet for Rs 7,300 crore fundraising through debt to the monitoring committee of the lenders.
Previously, IIHL had informed Reliance Capital's committee of creditors that it intended to complete the transaction by January 31, 2025. However, it later sought an extension until February 25.
Earlier this year, IIHL had secured approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (Irdai), as well as stock and commodity exchanges.
Following the acquisition, IIHL plans to significantly expand its banking, financial services, and insurance (BFSI) sector, aiming to grow its valuation more than threefold to USD 50 billion within five years, compared to its current valuation of USD 15 billion as of September 30, 2024.
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