Reliance Capital Pursues Delisting of Shares After IndusInd Bid
Delisting Process Initiated
Reliance Capital, facing significant debt, has initiated the process to delist its shares from stock exchanges. The company has filed applications with the BSE and NSE for the delisting of its equity shares, following approval from the monitoring committee. Additionally, it has sought to delist its non-convertible debentures from the BSE, as stated in a regulatory filing.
IndusInd International Holdings Ltd (IIHL) Bid
Mauritius-based IndusInd International Holdings Ltd (IIHL) emerged as the successful bidder for Reliance Capital's resolution, offering ₹9,650 crore. Subsequently, IIHL contributed an additional ₹200 crore to improve the company's solvency beyond the initial bid amount. The National Company Law Tribunal (NCLT) in Mumbai approved IIHL's resolution plan on February 27, 2024. The deadline for completing the transaction was extended to January 31, 2025.
Background and Regulatory Intervention
Reliance Capital is registered with the Reserve Bank of India (RBI) as a core investment company. It oversees several entities such as Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Money, Reliance Securities, Reliance Asset Reconstruction, and Reliance Commercial Finance. In November 2021, the RBI intervened due to governance issues and payment defaults by the Anil Dhirubhai Ambani Group company. The central bank replaced Reliance Capital's board and appointed Nageswara Rao Y as the administrator. In February 2022, he invited bids to take over the company.
Strategic Measures for Resolution
These steps taken by Reliance Capital are part of its ongoing efforts to resolve its financial difficulties through strategic measures. By delisting its shares and engaging with potential investors like IIHL, the company aims to stabilize its operations and address its debt obligations effectively.
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