Hinduja-backed group set to take over Reliance Capital for $1.17bn
MUMBAI, November 23, 2024
IndusInd International Holdings Limited (IIHL), a company backed by Indian business congomerate Hinduja Group, has cleared the last hurdle for the $1.17 billion acquisition of Anil Ambani’s Reliance Capital (RCAP) with Department for Promotion of Industry and Internal Trade (DPIIT) giving a go-ahead.
The green signal from Indian Government’s DPIT was necessary as some of the IIHL shareholders were residents of Hong Kong, a special administrative region of China, said IIHL in its statement.
As per DPIT norms, if an entity from a nation sharing a land border with India (China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan), or if a citizen or permanent resident of any such country is the beneficial owner of an investment in India, they are required to pursue investment through the government approval route, it stated.
The DPIT approval now paves the way for IIHL to close the transaction before the deadline of January 31, 2025, it added.
Investment experts said the RCAP acquisition will give a boost to the IIHL strategy to enhance its presence in the Banking and Financial Services and Insurance (BFSI) sector in India and the Middle East.
IIHL has a large shareholding from the Indian diaspora in the UAE. Last year an IIHL board meeting in Dubai had approved a capital raising of $1.5 billion to fund the (RCAP) acquisition.
It is the promoter of IndusInd Bank which has a representative presence in the UAE, and the RCAP acquisition will bolster the growth strategy of IIHL and IndusInd Bank.
The underlying operating companies in RCAP are in Insurance (Life, General and Health), Asset Reconstruction, Broking, etc and augur well to meet IIHL’s aspirations in the BFSI sector, according to experts.
Apart from financial services, the Hinduja Group’s business and investment interests in the UAE and region include GCC’s only bus manufacturing plant, Ashok Leyland and downstream petroleum products entity, Gulf Oil Middle East.-TradeArabia News Service
