IIHL eyes valuation of $50 bn by 2030: Chairman Ashok Hinduja

IndusInd International Holdings Ltd (IIHL) chairman Ashok Hinduja has said that the company is now targeting a valuation of $50 billion by 2030 as it completed acquisition of Reliance Capital. He made this announcement following the completion of acquisition of debt-ridden Reliance Capital after three-year-long resolution process. On the listing of insurance companies, Hinduja said it may happen after two years of value creation.

The group plans to list Reliance Capital’s insurance business as a separate entity after two years. “…We have two years to go to add value creation to this and then plan for listing,” Hinduja told reporters at a press conference in Mumbai.

IIHL has transferred the bid amount to the escrow account of the lender, and the takeover of the management from the administrator will happen today.

"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.

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

The value of Reliance Capital's insurance business on a conservative basis would be ₹20,000 crore, said Ashok Hinduja.  IIHL would complete the review of the entire RCAP business and take a call on the fund infusion required, he added.

Till the business meets value creation requirements, he said, capital infusion would not be an issue. With regard to subsidiaries, he 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.

He further said that broking and asset reconstruction business will be retained by the new management. RCAP, registered as a core investment company with the RBI, has several entities, including Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Money, Reliance Securities, Reliance Asset Reconstruction, and Reliance Commercial Finance.

The financial services firm has 1.28 lakh employees and the new management would protect the interest of employees to the extent possible, he assured.

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".

Citing the latest NCLT direction, he said it advised all parties to complete procedural issues for the ownership transfer to IIHL by March 20. The National Company Law Tribunal, in its last hearing, had asked all parties to ensure completion of the implementation 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 (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.

The central bank appointed Nageswara Rao Y as the administrator, who subsequently invited bids for the company's takeover in December 2021.