Hinduja Group firm plans to acquire RCAP by January and grow its financial services business to $50 billion in five years.

Hinduja Group’s IndusInd International Holdings Ltd (IIHL) expects to finalize its acquisition of debt-laden Reliance Capital (RCAP) by the end of January 2024. IIHL, which won the bid for Rs 9,650 crore, aims to triple its banking, financial services, and insurance (BFSI) business to $50 billion by 2030. The company has also committed an additional Rs 200 crore to improve RCAP’s solvency.

The acquisition is in its final stages, with only a few administrative procedures remaining. Once completed, IIHL will begin delisting RCAP’s shares, which will take about 4-6 weeks. The equity portion of the Rs 9,650 crore deal is Rs 2,750 crore, with the rest being debt.

Post-acquisition, IIHL plans to rebrand RCAP, although the company will continue using its current name for three years per NCLT approval. Business expansion will focus on bancassurance and digitalization, with IndusInd Bank likely handling bancassurance partnerships.

IIHL does not foresee major management changes but will appoint five new directors to RCAP. The group plans to divest most of RCAP’s 39 subsidiaries, which are mostly small, non-core entities, expecting to raise around Rs 1,000 crore from these sales. The funds will be used for debt repayment and new investments.

An IPO for RCAP is being considered after two years of operations. The RBI had intervened in RCAP’s governance in 2021, leading to the appointment of an administrator and the eventual sale of the company.