Reliance Capital Pursues Delisting of Shares as Part of Resolution Process Following IndusInd Bid

Reliance Capital, burdened with debt, has initiated the process to delist its shares from stock exchanges. The company has filed applications with BSE and NSE for delisting its equity shares, following the monitoring committee's approval. Additionally, it has sought to delist its non-convertible debentures from BSE, as stated in a regulatory filing.

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Mauritius-based IndusInd International Holdings Ltd (IIHL) emerged as the successful bidder for Reliance Capital's resolution, offering Rs 9,650 crore. Subsequently, IIHL contributed an additional Rs 200 crore to enhance the company's solvency beyond the bid amount. The National Company Law Tribunal (NCLT) in Mumbai approved IIHL's resolution plan on February 27, 2024. The deadline for completing the transaction was extended to January 31, 2025.

Resolution Process and Regulatory Actions

Reliance Capital is registered with the Reserve Bank of India (RBI) as a core investment company. It oversees several entities such as Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Money, Reliance Securities, Reliance Asset Reconstruction, and Reliance Commercial Finance. In November 2021, the RBI intervened due to governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.

The central bank replaced the board of Reliance Capital and appointed Nageswara Rao Y as the administrator. In February 2022, he invited bids to take over the company. This move was part of efforts to address the financial challenges faced by Reliance Capital and ensure a structured resolution process.

The steps taken by Reliance Capital reflect its ongoing efforts to resolve its financial difficulties through strategic measures. By delisting its shares and engaging with potential investors like IIHL, the company aims to stabilise its operations and address its debt obligations effectively.