IIHL completes acquisition of Reliance Capital, insurance units of debt-ridden firm to be listed in 2-3 years: Report

IndusInd International Holdings Ltd (IIHL)'s Chairman Ashok P. Hinduja on March 18, announced the acquisition of Reliance Capital, completing the three-year-long resolution process of the debt-ridden company. According to news agency PTI, IIHL has transferred the bid amount to the escrow account of the lender, and the management takeover from the Administrator will take place on March 19. 

According to news agency Reuters, IIHL said it will list the insurance units of Reliance Capital in two to three years, after it completed the transaction to buy the financial services firm. Mauritius-based IIHL emerged as the successful suitor with a bid of ₹9,650 crore for the resolution of Reliance Capital (RCAP). 

Also Read: IndusInd hasn’t asked for more capital, future actions hinge on external audit report: Ashok Hinduja

Later, the company paid ₹200 crore to bolster RCAP's solvency, which was over and above the bid amount. "The transaction from our side is over. We have worked on this deal for three years. As we are speaking, money is moving from one escrow to another," Hinduja said while addressing the media on Tuesday.

IIHL buys Reliance Capital: Key metrics of the transaction

The journey for value creation would now begin, he said, adding that the value of Reliance Capital's insurance business on a conservative basis would be ₹20,000 crore. IIHL would complete the review of the entire RCAP business and take a call on the fund infusion required, Hinduja said. Till the business meets value creation requirements, he said, capital infusion would not be an issue.

Also Read: Reliance Capital to be rebranded under IndusInd after takeover, Hindujas tell NCLT

With regard to subsidiaries, Hinduja said there are about 39-40 entities of Reliance Capital and the new management would divest many of them as they are mostly small shell entities with small businesses. Broking and Asset Reconstruction business will be retained by the new management.

RCAP, registered as a core investment company with the Reserve Bank of India (RBI), has several entities, including Reliance Nippon Life Insurance Ltd, Reliance General Insurance Ltd, Reliance Money Ltd, Reliance Securities Ltd, Reliance Asset Reconstruction Ltd, and Reliance Commercial Finance Ltd. 

The financial services firm has 1.28 lakh employees and the new management would protect the interest of employees to the extent possible. According to PTI, the blending of IndusInd band may take place over 6-9 months. With the acquisition of RCAP, IIHL is targeting a valuation of $50 billion by 2030.

Also Read: Reliance Capital lenders accuse IIHL of non-compliance, company denies claims

The National Company Law Tribunal (NCLT), in its last hearing, had asked all parties to ensure completion of the process by March 20 while posting the matter for further hearing on March 25, 2025. In April 2023, IIHL emerged as the successful resolution applicant by winning the bid for Reliance Capital under the Corporate Insolvency Resolution Process with an offer of ₹9,650 crore.

Last year, IIHL secured requisite regulatory approvals from the RBI, the Insurance Regulatory and Development Authority of India (IRDAI), and relevant stock and commodity exchanges. Reliance Capital was placed under the RBI-appointed administration in November 2021 due to governance lapses and payment defaults associated with the Anil Dhirubhai Ambani Group. The central bank appointed Nageswara Rao Y as the administrator, who subsequently invited bids for the company's takeover in February 2022.