On 17 November, the Reserve Bank of India (RBI) granted approval for the resolution plan of financially troubled Reliance Capital. This decision sets the stage for the acquisition of Reliance Capital by IndusInd International Holdings Ltd (IIHL), a Hinduja Group entity. Reliance Capital announced the RBI's approval in a regulatory filing, stating that the Administrator of the company received a "No objection" letter dated 17 November 2023.
The acquisition process had IIHL emerge as the top bidder, offering Rs 9,650 crore in the second round of auctions concluded in April. The RBI had taken control of Reliance Capital's board on 29 November 2021, citing payment defaults and severe governance issues. Nageswara Rao Y was appointed as the administrator to oversee the Corporate Insolvency Resolution Process (CIRP).
Reliance Capital marks the third major non-banking financial company (NBFC) against which the RBI initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The other two entities were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL). Following the RBI's intervention, an application for the initiation of CIRP against Reliance Capital was filed at the Mumbai bench of the National Company Law Tribunal.
In February of the previous year, the RBI-appointed administrator had solicited expressions of interest for the sale of Reliance Capital. With the recent RBI approval, the resolution plan moves forward, signaling a potential acquisition by IIHL and a step toward resolving the financial challenges faced by Reliance Capital.