Reliance Capital Requests RBI for Extension in Asset Transfer Deadline to Hinduja Group

The ongoing saga of Reliance Capital's (RCAP) resolution process has taken a new turn as the administrator of the debt-laden firm has reached out to the Reserve Bank of India (RBI) for an extension on the deadline to finalize the transfer of its assets. The company in question, Aasia Enterprises, part of the Hinduja Group, was set to acquire Reliance Capital's assets. However, the original deadline for this significant transfer, which was set for Friday, has been met with a request for an extension.

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According to sources familiar with the matter, the RCAP Administrator has proposed a 10-day extension, pushing the deadline to May 27. This request comes in light of the RBI's previous approval on November 17, 2023, which stipulated a six-month validity period for the transfer. It's noteworthy that May 27 is also the cut-off date set by the National Company Law Tribunal (NCLT) Mumbai for the implementation of the resolution plan by the Hinduja Group company.

The NCLT had given its nod to IndusInd International Holdings Ltd., another entity under the Hinduja Group, endorsing its Rs 9,650-crore resolution plan for Reliance Capital on February 27. This approval came with a directive to execute the plan within a 90-day window, concluding on May 27.

This development is part of a broader narrative that began in November 2021 when the RBI took a decisive step by superseding Reliance Capital's board. This action was prompted by governance concerns and payment defaults attributed to the Anil Dhirubhai Ambani Group entity. In response, Nageswara Rao Y was appointed as the administrator, tasked with steering the company towards recovery. By February 2022, bids were invited to take over Reliance Capital, which reported debts exceeding Rs 40,000 crore.

The process saw initial interest from four applicants presenting resolution plans. However, these were subsequently rejected by the committee of creditors due to lower bid values. A subsequent challenge mechanism saw participation from IIHL and Torrent Investments, leading to the current scenario where IndusInd International Holdings Ltd.'s resolution plan has been approved.

This request for an extension underscores the complexities involved in resolving such high-stake financial distress situations. As stakeholders await the RBI's decision on this extension request, it remains clear that every effort is being made to navigate through these challenges towards a viable resolution for Reliance Capital.