Ashok Hinduja. File photo: Arrangement
IndusInd International Holdings Ltd (IIHL), the Mauritius-based Investment Holding Company, which had emerged as the successful bidder to acquire Reliance Capital Ltd (RCL) through the Corporate Insolvency Resolution Process under the Insolvency & Bankruptcy Code (IBC) for ₹9,661 crore said it would make the payment to RCL’s lenders only after receiving all approvals.
Except for Insurance Regulatory and Development Authority of India (IRDAI) , the company has received approvals from all other regulators including the Reserve Bank, Competition Commission of India and Securities & Exchange Board of India (SEBI).
The current deadline to make payment is May 27, 2024.
“If you ask me, are we ready for 27th? I would say we are ready for even on 15th May,” Ashok P Hinduja, Chairman, IIHL said while interacting with journalists.
“Now, if the approvals are not there, no buyer will make the payment. And suppose there is any delay, our money is stuck up. We can’t take control of the company,” he said.
Considering the uncertainty over the timing of the IRDAI approval he said, “If you follow the order, the order very clearly says that this payment should be made 90 days after the NCLT order, subject to various approvals. Now, if some approval is pending, I can’t take a risk and make the payment. I have to wait for it,” he added.
Mr Hinduja said IIHL has secured a letter from a consortium of lenders expressing interest to lend ₹7,500 crore for the RCL acquisition. The rest of the money will come as equity from IIHL.
“If tomorrow I get the approval from IRDAI, I will be ready in 48 hours, within the 27th of May to make the payment,” 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.
Mr Hinduja also said that IIHL, the promoter of IndusInd Bank Ltd would gradually increase its stake in the private sector bank from the current 15% to 26% as per RBI regulations.
“It [the stake] will [be increased]. To do today, I need more than $1.5 billion. But I will not do at one time. As and when the growth pattern [in the bank] will come, the fund will be provided,” Mr Hinduja said.
He said once the company gets RBI approval to increase stake, it would start the process of raising the capital through the bank or through the market. “Or we will create a combination,” he added.
Mr Hinduja said, IIHL through various acquisitions would emerge as a major player in the BFSI (Banking, Financial Services & Insurance) space and eyeing market capitalisation of $50 billion by 2030.
“As far as IIHL is concerned, they are open for anything. The pockets are full. Any opportunity will come, we will definitely look. I would say not only in India, outside India also,” Mr Hinduja said.
“To take an example, currently due diligence is going on for a bank in Swiss, in Liechtenstein, in Germany, and one other, Luxembourg. So four entities under one umbrella. If everything goes well, we will have it,” the chairman added.
