IndusInd International Holdings (IIHL), which has a significant shareholding from the UAE out of the 600 plus globally dispersed Ultra HNWI stakeholders today said it has completed the acquisition of Anil Ambani’s Reliance Capital (RCAP) at US$1.17 billion, strengthening its resolve for global expansion in the Banking, Financial Services and Insurance (BFSI) sector.
In a statement, IIHL said the acquisition of RCAP follows a three-year-long resolution process of the debt-ridden company. The acquisition also paves the way for targeting a valuation of USD 50 billion for IIHL by 2030, said Chairman Ashok Hinduja, adding that the company remains open to exploring global investment opportunities including in the GCC and MENA region.
“If the Board recommends any such opportunity, definitely we will look at it; viability has to be there. There are many opportunities coming from Europe, Sri Lanka, and Indonesia. But, unless our investment banking team is comfortable, we will not go ahead,” he said.
He said the transaction relating to the acquisition from the IIHL side is over and the “journey for value creation would now begin,” adding that the value of RCAP’s insurance business on a conservative basis would be US$2.34 billion.
“Now, with this acquisition, we are entering the insurance business in addition to banking. We also took a 60% stake in Invesco’s mutual fund business, and once approvals are in place, we will have a complete presence across the BFSI sector,” Ashok Hinduja said.
Earlier, IIHL had said it was looking at small banks in European countries such as Switzerland, Liechtenstein, Germany and Luxembourg, and due diligence processes were on. In the same vein, IIHL will also be keen to expand its banking and financial services business in other parts of the world, including in the GCC.
In the UAE, IIHL’s BFSI business includes IndusInd Bank. .
Ashok Hinduja said there are about 39-40 entities of RCAP and the new management would divest many of them as they are mostly small shell entities with small businesses. Broking and Asset Reconstruction business will be retained by the new management.
RCAP registered as a core investment company with India’s Reserve Bank of India (RBI), has several entities, including Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Money, Reliance Securities, Reliance Asset Reconstruction, and Reliance Commercial Finance. The financial services firm has 1,28,000 lakh employees and the new management would protect the interest of employees to the extent possible.
