Ashok Hinduja, chairman, IndusInd International Holdings

IIHL has received clearance from Sebi, CCI (Competition Commission of India) and RBI and is awaiting the green signal from insurance sector regulator IRDAI for the Reliance Capital acquisition

Mumbai:

Apart from expanding the existing life and general insurance business of the insolvent Reliance Capital Limited(RCL), Hinduja group’s IIHL (IndusInd International Holdings) will be keen to revive its defunct health Insurance company, said Ashok Hinduja, chairman, IIHL, while announcing the company’s ambitious plans to achieve a valuation of $50 billion by 2030 after acquiring RCL.

IIHL is the promoter of IndusInd Bank and had recently acquired Invesco Asset Management India Ltd.

“We plan to grow all the existing businesses of RCL including general and life insurance . RCL’s health insurance license is still valid. We will restart the health insurance business. That will be the new thing,’’ said Hinduja adding that eventually the branding will also be changed.

Earlier, after facing financial crisis, RCL was asked by the Indian insurance regulator IRDAI to merge its health insurance business with its another subsidiary Reliance General Insurance.

IIHL, a Mauritius special purpose vehicle(SPV) along another Indian company Aasia Enterprises, also promoted by Hindujas, have already received the NCLT’s (National Company Law Tribunal) nod for buying out RCL under the insolvency and bankruptcy code by paying Rs 9,661 crore.

IIHL has also received clearance from Sebi, CCI (Competition Commission of India) and Reserve Bank of India (RBI) and is awaiting the green signal from the IRDAI for fully acquiring RCL.

May 27 has been set as the deadline by the NCLT to conclude the purchase and funding has been tied up for the deal, informed Hinduja.

The IRDAI, after receiving the initial proposal, had refused its approvals by raising various queries on the shareholding structure of IIHL and the company has already submitted a second proposal to the insurance regulator.

“We have submitted the second proposal through the proper processes. And I am hopeful that the approval from the IRDAI will come as quickly as possible. Normally, the approval process takes two to three months, what we understand. The original Application was submitted in November, 2023. So, if we check the timeline, we’d say that the IRDAI was submitted with whatever information they required, right from November onwards. So, I think they would move fast with the approval process,’’ clarified Hinduja adding that the regulator has its own time frame.”

One of the incentives for growing businesses within Reliance Capital is the Rs 40,000 crore of past tax losses incurred by the company prior to the resolution which will bring down future tax liability of business inherited from Reliance Capital, stated Hinduja.

If the IRDAI approvals don’t come by May 27, the deadline for the take over of RCL by IIHL has to be extended, expected Hinduja.

“The funding of Rs 9,661 crore will have 25 per cent of equity, 75 of debt. If tomorrow, I get the approval from IRDAI, I will be ready in 48 hours, within the 27th of May, to make the payment,’’ said Hinduja.

To a query on whether the Japanese partner Nippon Life in life insurance joint venture, Reliance Nippon Life Insurance, would want to increase its holding beyond the present 49 per cent, Hinduja said IIHL generally prefers having majority ownership in its businesses.

“They have not told us about their plans to increase their stake in life insurance venture beyond 49 per cent. They are happy with this life insurance business. They have board members. They have worked very well, and grown,’’ said Hinduja.

“First, we have to create a value. So, there is no hurry for any divestment or any increase in leaving us as a minority,’’ he added. But, hypothetically, we will be willing to sell our stakes to any foreign player, who is willing to pay a much higher value over normal market valuation for the insurance companies. I have not started these companies, I have acquired them for value creation. My concern is value creation for the shareholders of IIHL. If IIHL tomorrow says don’t be in a hurry, we would like to continue, the board will continue,’’ clarified Hinduja.

According to Hinduja, his company is happy with the current CEOs and CFOs who are working with insurance companies.

“ After meeting them, and interviewing them, we found them fine. So, why should we change? What they need is the strength of the capital. As and when they need, as and when more products are to be built, more money is required, all that will be provided. So now our team is working with outside consultants to come up with plans on how to grow this BFSI business and what else can be done,’’ stated Hinduja.

On whether, the existing ESOPs of the present management of insurance companies will be allowed, Hinduja said, “I have assured them that once we take over, we have to relook to everything. But we are open to ESOPs. Yes, but I told them, I have no commitment for the past. That commitment of the past can be relooked as a fresh.”

IIHL is also in the process to increase its stake from 15 per cent to 26 per cent in Indusind Bank and is looking for acquisition of smaller sized banks in various European countries, Hinduja said.