IIHL Takes Control of Reliance Capital, New Board Appointed

New Delhi, Mar 19 (PTI) IndusInd International Holdings Ltd (IIHL) on Wednesday took control of Reliance Capital (RCAP), completing a three-year resolution process after paying off the debt-ridden firm's lenders.

IIHL has taken over the board of the RCAP and its subsidiaries, and the first meeting of the new board was held on Wednesday, sources said.

According to sources, new board members include Moses Harding John and Arun Tiwari as approved by the Reserve Bank of India (RBI).

With this acquisition, IIHL gains control over about 40 entities, including key subsidiaries like Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Securities, and Reliance Asset Reconstruction. The company aims to establish bancassurance ties and implement digitization across these subsidiaries.

"Now, with this acquisition, we are entering the insurance business in addition to banking. We also took a 60 per cent stake in Invesco's mutual fund business, and once approvals are in place, we will have a complete presence across the BFSI sector," IIHL chairman Ashok Hinduja said on Tuesday.

Asked about the listing of insurance companies, Hinduja had said it may happen after two years of value creation.

He exuded confidence that with the acquisition of Reliance Capital, IIHL is targeting a valuation of USD 50 billion by 2030.

The journey for value creation at IIHL has now begun, he said, adding that the value of Reliance Capital's insurance business at present on a conservative basis would be Rs 20,000 crore.

Speaking on IIHL's global expansion plans, Hinduja had said that the company remains open to exploring global opportunities, with IIHL's high net-worth shareholders always looking for opportunities to invest.

"If the Board recommends any such opportunity, definitely we will look at it; viability has to be there. There are many opportunities coming from Europe, Sri Lanka, and Indonesia. But, unless our investment banking team is comfortable, we will not go ahead," he had said.

IIHL emerged as the successful suitor with a bid of Rs 9,650 crore for the resolution of Reliance Capital. Later, the company paid Rs 200 crore to bolster Reliance General Insurance's (RGIC) solvency, which was over and above the bid amount.

In April 2023, IIHL emerged as the successful resolution applicant by winning the bid for Reliance Capital under the Corporate Insolvency Resolution Process (CIRP) with an offer of Rs 9,650 crore.

Last year, IIHL secured all requisite regulatory approvals from the Reserve Bank of India (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.