The successful bidder for Reliance Capital (RCap), Hinduja Group, has revised its fundraising strategy by dividing it into two sections: local and international. With a 15% interest rate, the firm hopes to borrow ₹7,500 crore from a combination of local and foreign private credit funds. Offering a 15% return, Hinduja intends to fund ₹3,500 crore domestically from investors, including IIFL's 360 ONE. They are in talks with private credit funds like Cerberus and Edelweiss Alternatives about the international area, where they are providing 15% plus withholding tax. It is anticipated that the offshore debt will cost a total of around 16.5%, including withholding tax.
360 ONE and Barclays are serving as arrangers. A spokesman for Edelweiss declined to comment, while representatives for Hinduja, Barclays, 360 ONE, and Cerberus did not immediately return calls for comment.
With a hearing set on June 25, IIHL, the group's investment arm, has asked for a ninety-day extension beginning on May 27, 2024, to put the agreed resolution plan into effect.
The ₹9,650 crore proposal for Reliance Capital by Hinduja Group was authorized by the creditors' committee in July of last year. On November 30, 2021, the Reserve Bank of India (RBI) took over the Anil Ambani-owned business, which had ₹40,000 crore in debt. The reason for the takeover was governance issues. The administrator is Nageswara Rao Y, a former executive director of the Bank of Maharashtra.
IIHL is authorized to purchase three Reliance Capital insurance firms by the insurance regulator, "subject to certain regulatory, statutory, and judicial clearances." Although the successful bidder is prohibited from pledging insurer shares, this clearance is essential for the transfer of Reliance General Insurance, Reliance Nippon Life, and Reliance Health Insurance to IIHL.
According to ET, IIHL BFSI (India), which is associated with the Hinduja Group, requested permission from the banking regulator last month to pledge all of Reliance Capital's shares in order to raise ₹8,000 crore. Investors want to know if the RBI has approved the company's structure for the acquisition of Reliance Capital.
