New Delhi: Hinduja Group company IIHL is expecting to complete the acquisition of debt-ridden Reliance Capital (RCAP) by next month and aims to ramp up banking, financial services, and insurance (BFSI) business more than three-fold to $50 billion in the next five years.
“Most of the approvals and procedures related to the resolution process of Reliance Capital are complete. Couple of the procedures at the end of the administrator and CoC are to be completed. We hope that all these will be over in the next 4-6 weeks and RCAP should come into the fold of Hinduja Group by the end of January,” IIHL Chairman Ashok P Hinduja said.
With the acquisition of RCAP, he said IndusInd International Holdings Ltd (IIHL) is targeting a valuation of $50 billion by 2030 as against the current valuation of $15 billion (as on September 30, 2024).
Mauritius-based IIHL emerged as the successful suitor with a bid of Rs 9,650 crore for the resolution of RCAP. Later, the company paid Rs 200 crore to bolster RCAP solvency, which was over and above the bid amount.
The National Company Law Tribunal (NCLT), Mumbai, on February 27, 2024, approved IIHL’s resolution plan and subsequently extended the deadline for completion of the transaction to January 31, 2025.
As soon as delisting of shares is over, money will be handed over to RCAP debtors, he said, adding that delisting usually takes 4-6 weeks.
Other procedures include creation of trust for transfer of excluded assets, capital reduction, release of all charges on assets of RCAP, etc. Of the total amount, Rs 2,750 crore is the equity portion while the rest is debt and all these are fully committed, he said.
With regard to branding, he said, “For three years we can continue with the same name as per the NCLT approval but we are keen to promote the IndusInd brand and professional agencies are working on blending the brand for campaign post-acquisition.”
Sharing the road map for business expansion, Hinduja said the focus will be on value creation, bancassurance and digitalisation to improve customer and policyholder experience.
For bancassurance partnerships, he said Reliance Capital will negotiate with IndusInd Bank, a subsidiary of IIHL.
IndusInd Bank serves about 41 million customers through 3,040 branches/banking outlets and 3,011 ATMs, reaching 1.61 lakh villages across India.
Asked about the change in top executives post-acquisition, he said the current management would run the business for the momentum as they are doing a good job. “We don’t see a need to change them. If the companies have survived and generated profits in the last 3-4 years, it means they are performing well. Value creation is essential,” he said.
However, he said, five directors, including Moses Harding John and Arun Tiwari, will be inducted into Reliance Capital as approved by the RBI.