Sebi Approves Hinduja Group Firm's Ownership Change For Reliance Wealth

Aasia Enterprises, a part of the Hinduja Group, has received approval from the market regulator for a change of control in Reliance Wealth Management, in accordance with the rules governing investment advisers and portfolio managers. Additionally, the Securities and Exchange Board of India (Sebi) has sanctioned an application for a proposed change in control at Reliance Securities under regulations governing research analysts and investment advisors.

This change in control comes as part of the broader transition at parent company Reliance Capital, shifting from the erstwhile Anil Ambani group to the Hinduja group. This transition follows IndusInd International Holdings' (IIHL) successful bid to acquire the financially troubled Reliance Capital through the Corporate Insolvency Resolution Proceedings (CIRP) process of the Insolvency and Bankruptcy Code (IBC).

IIHL, led by the Hinduja group, emerged as the successful resolution applicant after the initiation of the CIRP process against Reliance Capital in November 2019. IIHL's bid garnered overwhelming support from creditors, with a 99.6 per cent majority vote. The National Company Law Tribunal (NCLT) subsequently approved the resolution plan in February 2024.

Reliance Capital had a secured debt of Rs 16,000 crore, and as per media reports, lenders are set to receive Rs 10,000 crore from IIHL, including Rs 9,661 crore in upfront cash. Nageswara Rao Y has been appointed by the Reserve Bank of India as the company's administrator under the IBC, with the Mumbai bench of the NCLT endorsing the resolution plan on 27 February.

The terms of the Resolution Plan are slated for implementation by 27 May, subject to the fulfilment of certain prior conditions, including securing approvals from various sector regulators. The NCLT's order stipulates that the 90 days period will be automatically extended to accommodate the time required for meeting such conditions.

With the acquisition of Reliance Capital, the Hinduja group will enter into various segments, including life, general, and health insurance businesses, as well as asset reconstruction and broking. Additionally, reports indicate that the group is in advanced discussions to acquire a majority stake in Invesco AMC as part of its foray into the mutual fund arena.