Reliance Capital’s subsidiaries and associates are engaged in various businesses in the financial service sector including insurance
New Delhi:
The Competition Commission of India (CCI) has approved acquisition of controlling stake in Reliance Capital Ltd by Hinduja group-owned entities like IndusInd International Holdings Ltd, IIHL BFSI (India) Ltd, and Aasia Enterprises LLP.
RCL is undergoing insolvency resolution proceedings initiated under the Insolvency and Bankruptcy Code (IBC). Apart from other financial entities, RCL is also the holding company of two insurers-Reliance General Insurance and Reliance Nippon Life Insurance.
The proposed combination relates to the acquisition of control by acquiring shares in Reliance Capital Ltd by IndusInd International Holdings Ltd (IIHL), IIHL BFSI (India) Ltd (IIHL BFSI), and Aasia Enterprises LLP (Aasia).IIHL,
IIHL is a Global Business License (Category 1) licensee company incorporated in the Republic of Mauritius and regulated by Mauritius’s Financial Services Commission. The principal activity of IIHL is investment holding whereby IIHL holds shares in different companies spread across sectors.
IIHL does not manufacture, supply, distribute, or sell any products or provide any services. RCL is registered as a Non-Banking Financial Company Core Investment Company (CIC) – Non-Deposit Taking Systemically Important (NBFC-CIC-ND-SI) under Section 45-IA of the Reserve Bank of India Act, 1934.
As a CIC, RCL is primarily a holding company, holding investments in its subsidiaries, associates, and other group companies. RCL’s subsidiaries and associates are engaged in various businesses in the financial service sector including insurance.
In July, Hinduja group-owned IndusInd International Holdings (IIHL), the promoter of IndusInd Bank, announced a USD 1.5-billion capital-raising plan to fund the proposed acquisition of Reliance Capital and increase its stake in the lender. The board of the Mauritius-registered IIHL also decided to increase its holding in Reliance Capital to 26 per cent from the present 15 per cent.
In June, the lenders of the crippled Reliance Capital accepted the revised Rs 9,661 crore bid by IndusInd International Holdings.
In November 2021, the Reserve Bank of India (RBI) superseded the board of Reliance Capital in view of payment defaults and serious governance issues.
The deals beyond a certain threshold need approval from the regulator, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.
IANS