Hinduja gets NCLT approval to acquire Anil Ambani’s Reliance Capital

IndusInd International Holdings Ltd (IIHL), an entity of Hinduja Group, has received approval from the National Company Law Tribunal (NCLT) to acquire bankrupt Reliance Capital (RCap). The Mumbai bench of the NCLT on Tuesday approved the ₹9,650 crore resolution plan submitted by IIHL in June 2023 in the second round of bidding for the debt-laden Anil Dhirubhai Ambani Group company.

On November 30, 2021, the Reserve Bank of India (RBI) superseded the board of RCap because of payment defaults and governance issues. The central bank had appointed Nageswara Rao Y as the administrator for the corporate insolvency resolution process (CIRP) of the firm, who invited bids in February 2022 for the sale of the company.

The debt resolution of RCap witnessed twists and turns in the last two years. In the first round of auction for acquiring the stressed assets of RCap, six applicants - Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment and B Right Real Estate - had reportedly submitted their resolution plans in the range of ₹4,000 crore to ₹4,500 crore, which were rejected by the committee of creditors (CoC) citing lower bid values.  

The CoC decided to conduct an e-auction and set the base price for bidding at ₹6,500 crore. Torrent Investment won the e-auction by offering the highest bid of ₹8,640 crore, outbidding IIHL’s ₹8,110 crore offer. However, the Hinduja Group firm submitted a revised bid of ₹9,000 crore post auction date.

The revised bid by Hinduja Group was challenged by Torrent in the NCLT and the Supreme Court. The Mumbai bench of the NCLT ruled in favour of Torrent after which the CoC challenged the order in the NCLAT. The NCLAT set aside the order of the Mumbai bench of the NCLT and allowed the lenders to conduct a second round of bidding to maximise their recovery from the sale of Reliance Capital.

RCap, having a debt of around ₹40,000 crore, was the third Anil Ambani group company that filed for bankruptcy after Reliance Communications, Reliance Naval and Engineering. In March 2022, Anil Ambani resigned from the board of group companies after the Securities and Exchange Board of India (SEBI) restrained him from associating with any listed company. It barred him and Reliance Home Finance from the securities market in February for allegedly siphoning off funds from the company. Ambani had to disassociate from two listed companies— Reliance Infrastructure and Reliance Power— which are also financially stressed.