DPIIT Greenlights Hinduja's Bold Move: IIHL's Strategic Acquisition of Reliance Capital

The Department for Promotion of Industry and Internal Trade (DPIIT) has authorized Hinduja Group's IIHL to acquire Reliance Capital, a debt-laden firm. This approval, crucial for the $9,861-crore deal, comes as part of a resolution plan after regulatory requirements due to IIHL's foreign shareholder ties.

The Department for Promotion of Industry and Internal Trade (DPIIT) has granted approval to Hinduja Group's IndusInd International Holdings Ltd (IIHL) for acquiring the financially troubled Reliance Capital Ltd. Sources indicate this green signal allows IIHL's Rs 9,861-crore bid to proceed, steering the resolution plan forward.

DPIIT's approval was necessary because some IIHL shareholders reside in Hong Kong, governed by China. According to Press Note 3, investments from entities or citizens from countries bordering India require government clearance. This condition had to be met as part of the acquisition deal.

NCLT Mumbai endorsed IIHL's resolution plan on February 27, 2024. With a tight deadline of January 31, 2025, hanging over the Hinduja Group, failing to complete the transaction would mean returning Rs 3,000 crore gathered from high-net-worth investors. Initially, the Reserve Bank of India had stepped in, citing governance and payment failures at Reliance Capital, leading to this restructuring process.

(With inputs from agencies.)