In a significant development, the National Company Law Tribunal (NCLT) granted approval to the ₹9,650 crore resolution plan proposed by IndusInd International Holdings Ltd (IIHL), a Hinduja Group entity, for the acquisition of bankrupt Reliance Capital Ltd. This decision marks a pivotal milestone in the protracted acquisition proceedings.
The tribunal, after deliberation, reserved its decision on the matter since 11 January, culminating in the recent approval of IIHL’s resolution plan. According to the tribunal’s order, the implementation of the resolution plan can commence within 90 days from its approval. However, certain regulatory clearances from key authorities such as the Insurance Regulatory and Development Authority of India (IRDAI), Securities and Exchange Board of India (SEBI), and the Competition Commission of India (CCI) are still pending.
To expedite the process, IIHL aims to seek the necessary regulatory approvals within the next month. Subsequently, the 90-day period for implementation will be set into motion, as mandated by the tribunal’s order.
The NCLT bench, led by justices Virendra Singh Bisht and Prabhat Kumar, emphasized that the approval of the resolution plan does not absolve the company from its statutory obligations and liabilities. Any such obligations will be addressed by the appropriate authorities in accordance with the law, underscoring the importance of compliance and accountability in the corporate landscape.
In July of the preceding year, IIHL, the promoter of IndusInd Bank, submitted a bid amounting to ₹9,861 crore for the acquisition of Reliance Capital. The bid garnered unanimous approval from the administrator and received overwhelming support from creditors, with an overwhelming 99% majority voting in favor of the proposal.
The approval of IIHL’s resolution plan heralds a new chapter in the trajectory of Reliance Capital, promising a path towards stability and revitalization under the stewardship of the Hinduja Group entity. It also underscores the resilience and adaptability of India’s corporate ecosystem in navigating complex restructuring processes amidst evolving regulatory frameworks.
As the acquisition journey progresses, stakeholders await the fulfillment of regulatory requirements and the subsequent realization of synergies envisioned through this strategic endeavor. The approval by NCLT stands as a testament to the collective efforts aimed at charting a course of sustainable growth and value creation in the realm of corporate restructuring and resolution.
