CCI approves IndusInd International Holdings, IIHL BFSI India, Aasia Enterprises stake acquisition in Reliance Capital

The Competition Commission of India (CCI) has approved the proposed stake acquisition in Reliance Capital by IndusInd International Holdings Ltd, IIHL BFSI India Ltd, and Aasia Enterprises. Reliance Capital Ltd (RCL) is a Reserve Bank of India (RBI)-registered non-banking, non-deposit-taking systemically important company (NBFC-CIC-ND-SI) engaged in the financial service sector.

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Acquisition Details

The combination involves the acquisition of a controlling stake in Reliance Capital Ltd by IndusInd International Holdings Ltd, IIHL BFSI India Ltd, and Aasia Enterprises. Upon completion of the transaction, IndusInd Bank, along with other entities, will hold a controlling stake in Reliance Capital.

IndusInd's Capital Raising Plan

In July 2022, the Hinduja group-owned IndusInd International Holdings (IIHL), the promoter of IndusInd Bank, announced a USD 1.5 billion capital-raising plan to fund the proposed acquisition of Reliance Capital and increase its stake in the lender. The board of the Mauritius-registered IIHL also decided to increase its holding in Reliance Capital to 26% from the current 15%.

Acceptance of Revised Bid

In June 2022, the lenders of the financially troubled Reliance Capital accepted the revised Rs 9,661 crore bid by IndusInd Bank.

RBI's Intervention

In November 2021, the Reserve Bank of India (RBI) superseded the board of Reliance Capital due to payment defaults and severe governance issues.

CCI's Role

Deals beyond a specific threshold require approval from the CCI, which monitors unfair business practices and promotes fair competition in the marketplace.