Hinduja Group’s IndusInd International Holdings (IIHL) is expected to seek a six-month extension from the Reserve Bank of India for the proposed transfer of control of Reliance Capital, sources told businessline.

In addition to IIHL, parts of Reliance Capital’s business will be transferred to its subsidiaries IIHL BFSI (India) Limited (IIHL BFSI), and Aasia Enterprises LLP (Aasia).

The extension has been sought as the implementation of the resolution is expected to take a few months even as the deadline for the approval granted by RBI is May 17.

The central bank had granted its approval on November 17, 2023 for six months. It had then said that in case the the proposal fails to be implemented in this time period, the acquirer will need to reapply for the same and provide reasons for the delay.

IRDAI nod pending

As per the NCLT order, IIHL is required to repay lenders within 90 days from the date of NCLT approval. IIHL’s resolution plan was approved by the NCLT on February 27 and has received the approval from RBI and CII. However, the insurance regulator IRDAI’s approval is awaited after it raised concerns regarding the funding of the insurance business.

IRDAI had written to the administrator of Reliance Capital on March 20, seeking details of IIHL’s proposed takeover of insolvent RCap and its insurance subsidiaries. The letter was in response to applications filed by the insurance subsidiaries and meeting held with the administrator since October 2023.

IRDAI also sought details of all 600 shareholders of IIHL for due diligence, and the equity stake held in IIHL by major shareholder groups acting in concert. It also sought details of the proposed structure of the insurance companies and details of the entities involved, including shareholding pattern and capital structure of the proposed SPVs (special purpose vehicles).

“It is proposed that another company is proposing to acquire entire equity of the RCL, which shall make RCL a wholly owned subsidiary of the said company. Please clarify why the same should not be construed as non-compliance,” IRDAI had then said, adding that if RCap will continue as a holding company, then why should it not be construed as an SPV.

Meanwhile, Torrent Investment’s plea challenging the second round of auction for the resolution of RCap is still pending in the Supreme Court.

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