Hindujas reportedly looking to raise up to $1 billion to finance Reliance Capital acquisition

The Hinduja family is reportedly looking to raise up to $1 billion (about Rs 8,200 crore) to fund the potential acquisition of Reliance Capital, for which it is the preferred bidder.

Some of the funds that have been tapped -- over the last few weeks to discuss the modalities of the proposed arrangement if the Hindujas were to get requisite court approvals for their bid -- include Farallon Capital, Oaktree, Ares Asia and Cerberus, The Economic Times reported citing sources.

The report further added that the financing could be backed by shares of Reliance Capital's life and general insurance arms, and the credit funds are likely to seek assurances from the Hinduja Group that such an arrangement will have the consent of the insurance regulator.

The timeline for closing such a financing may vary between three to six months, the report added, saying that it depends on legal hurdles and court approvals for the acquisition. Moreover, the final list of financiers could also change.

The Hinduja Group on July 3 said that Reliance Capital's lenders have approved a Rs 9,650 crore resolution plan made under the insolvency and bankruptcy code (IBC) rules from Hinduja Group company IndusInd International Holdings Limited (IIHL).

Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the insolvency and bankruptcy code (IBC). Kolkata-based Srei Group and Dewan Housing Finance Corporation (DHFL) were the other two.

The Reserve Bank of India (RBI) on November 29, 2021, superseded the board of Reliance Capital in view of payment defaults and serious governance issues.

In the first auction held in December, Torrent Investments made the highest offer of Rs 8,640 crore, followed by Hinduja Group at Rs 8,110 crore. Within 24 hours, Hinduja offered a revised bid of Rs 9,000 crore, which was then challenged by Torrent before the National Company Law Tribunal (NCLT).

The next auction took place on April 26 in which IIHL was the sole participant, offering Rs 9,650 crore upfront.

Also Read: Foxconn in talks to set up 4-5 semiconductor fab units in India: Report