Ashok Hinduja. File photo: Arrangement
IndusInd International Holdings Ltd (IIHL), a Mauritius-based Investment Holding Company emerged as the successful bidder to acquire Reliance Capital Ltd (RCL) through corporate insolvency process under the Insolvency and Bankruptcy Code (IBC) for ₹ 9,661 crore has said that it will make payments to RCL’s lenders only after receiving all approvals.
Except for the Insurance Regulatory and Development Authority of India (IRDAI), the company has received approvals from all other regulatory authorities, including the Reserve Bank, Competition Commission of India and Securities and Exchange Board of India (SEBI).
The current payment deadline is May 27, 2024.
“If you ask me, are we ready for 27th? I would say we are ready even for May 15,” said Ashok P. Hinduja, chairman of IIHL, while talking to journalists.
“Now, if there are no approvals, no buyer will make the payment. And suppose there is any delay and our money gets stuck. We cannot take control of the company,” he said.
Given the uncertainty over the timing of IRDAI approval, he said, “If you comply with the order, the order is very clear that this payment should be made 90 days after the NCLT order, subject to various approvals. Now if it’s pending approval I can’t take the risk and make the payment. I have to wait for it,” he added.
Hinduja said IIHL has secured a letter from a consortium of lenders expressing interest in borrowing ₹7,500 crore to take over RCL. The rest of the money will come from IIHL equity.
“If I get approval from IRDAI tomorrow, I will be ready to make the payment within 48 hours, i.e. by May 27,” he added.
With RCL, IIHL would have control over Reliance General Insurance Company Ltd, Reliance Nippon Life Insurance Company Ltd and Reliance Health Insurance Company Ltd, among others.
Hinduja also said IIHL, the promoter of IndusInd Bank Ltd, will gradually boost its stake in the private sector bank from the current 15% to 26% as per RBI regulations.
“This [the stake] will be [be increased]. To do this today, I need over $1.5 billion. But I won’t do it all at once. How and when growth pattern [in the bank] comes, the fund will be provided,” Hinduja said.
He said that once the company gets the RBI’s approval to boost its stake, the process of raising capital through a bank or the market will begin. “Or we will create a combination,” he added.
Hinduja said IIHL will become a major player in the BFSI (banking, financial services and insurance) space through various acquisitions and will reach a market capitalization of $50 billion by 2030.
“When it comes to the IIHL, they are open to anything. The pockets are full. Any opportunity arises, we will definitely consider it. I would say not only in India but also outside India,” Hinduja said.
“For example, currently there is due diligence of a bank in Switzerland, in Liechtenstein, in Germany and another one in Luxembourg. So four entities under one umbrella. If everything goes well, we will have it,” the president added.
