The National Company Law Tribunal (NCLT) on Tuesday approved the ₹9,650 crore resolution plan of IndusInd International Holdings Ltd (IIHL), a Hinduja Group entity, to acquire bankrupt Reliance Capital Ltd, marking a significant milestone in the prolonged acquisition process.
The tribunal had reserved its decision on the matter on 11 January.
The resolution plan can be implemented within 90 days from the plan’s approval, the tribunal’s order said. Regulatory approvals from the Insurance Regulatory and Development Authority of India, the Securities and Exchange Board of India, and Competition Commission of India remain pending.
These approvals will be sought within a month, following which the 90-day period of implementation begins, as per the order.
The NCLT bench led by justices Virendra Singh Bisht and Prabhat Kumar said, “The approval of the resolution plan shall not be construed as a waiver of any statutory obligations/liabilities of the company and shall be dealt by the appropriate authorities in accordance with law.”
Last July, IIHL, the promoter of IndusInd Bank, had placed a bid of ₹9,861 crore to acquire Reliance Capital, which was subsequently approved by the administrator. The bid also received overwhelming support from creditors, with a 99% majority voting in favour.
However, Hinduja was embroiled in a legal battle with Ahmedabad-based Torrent Investments regarding the submission of bids under the corporate insolvency resolution process (CIRP).
Torrent Investments had led the bidding during Reliance Capital’s insolvency auction in December 2022 with an offer of ₹8,640 crore. However, IIHL had proposed a higher bid of over ₹9,000 crore after the auction, prompting the lenders to initiate a second auction, or an extended challenge mechanism, to ensure the best recovery value for the insolvent firm.
Aggrieved Torrent had moved the NCLT in January 2023, which had sided with Torrent, ruling that the second auction violated CIRP norms.
This decision was contested by the lenders at the National Company Law Appellate Tribunal in March 2023, which permitted the second auction to proceed, aiming to maximize the value recovered from Reliance Capital.
Following which in August 2023, Torrent Investment appealed to the Supreme Court in a bid to prevent the NCLT from considering IIHL’s settlement plan. However, the apex court refused to interrupt the NCLT proceedings.
In November 2021, the Reserve Bank of India had superseded the board of Reliance Capital in view of payment defaults and serious governance issues.
Reliance Capital had a secured debt of ₹16,000 crore, with admitted claims at over ₹23,666 crore.