IIHL to raise Rs 3,000 crore via NCDs

New Delhi: According to sources, IIHL, a company under Hinduja Group, has submitted offer documents to raise Rs 3,000 crore through non-convertible debentures (NCDs) as part of its successful bid to take over the financially troubled Reliance Capital (RCAP).

Sources stated that the funds will be utilized to partially finance the purchase of RCAP, while another aspect of the deal, worth Rs 4,300 crore, is simultaneously progressing and is contingent on regulatory approvals and administrative formalities being completed. IIHL has submitted the NCD offer document to the BSE. Sources have stated that the NCD, which has a duration of 3.5 years, is anticipated to begin accepting subscriptions at the beginning of next week. IIHL has already provided its equity contribution of Rs 2,750 crore for the deal, which has been placed in a specified account controlled by the Committee of Creditors, overseen by NCLT.

On February 27, 2024, the NCLT Mumbai gave the green light to IIHL's resolution plan worth Rs 9,650 crore for the financially troubled firm. The board of Reliance Capital was replaced by the Reserve Bank of India in November 2021 due to governance problems and failure to make payments by the Anil Dhirubhai Ambani Group company.

The administrator appointed by the central bank, Nageswara Rao Y, called for bids in February 2022 to acquire the company. Reliance Capital had a debt exceeding Rs 40,000 crore, and four potential buyers had submitted resolution proposals. Nevertheless, the creditors' committee turned down all four proposals due to their lower bid amounts, leading to the initiation of a challenge process in which IIHL and Torrent Investments took part.