In a significant business development, Anil Ambani, the younger brother of India’s wealthiest man Mukesh Ambani, is currently facing delays in closing a colossal Rs 98,610 crore acquisition deal for Reliance Capital. The Hinduja Group has sought a 90-day extension until the end of August to complete this massive transaction. This move has come after apparent delays in obtaining necessary approvals from the Reserve Bank of India (RBI) and other governmental bodies.
According to an affidavit filed with the National Company Law Tribunal (NCLT), Hinduja Group’s IndusInd International Holdings Limited (IIHL) expressed that the completion of the deal is hindered by ongoing efforts from lenders to finalize a renewed borrowing proposal worth Rs 7300 crore and uncertainties surrounding the prevailing foreign investment norms. Approval from India’s central financial body, the Reserve Bank of India, is also awaited.
Hinduja Group’s strategy for concluding this enormous acquisition involves borrowing Rs 7,300 crore from various lenders while providing Rs 2,500 crore through an equity infusion from IndusInd International, sourced from outside India. This comprehensive financial effort aims to solidify the acquisition process, which was initiated several months ago when Anil Ambani’s Reliance Capital first received an buyout offer from Hinduja Group.
Revisiting the sequence of events, it is notable that the National Company Law Tribunal (NCLT) in Mumbai had given its approval to the resolution plan on February 27, directing IIHL to implement this resolution plan within a 90-day timeframe, concluding by May 27. However, with the stipulated deadline fast approaching, the setback in regulatory approvals has compelled the Hinduja Group to request an extension until the end of August.
The saga of this acquisition has drawn widespread attention given its enormous financial scale and the high-profile nature of the parties involved. Anil Ambani, known for his expansive business moves, now navigates through regulatory mazes to ensure the completion of one of the biggest deals of his career.
Dr. Ashok Hinduja, Chairman of the Hinduja Group, emphasized in a recent statement the hurdles they face. “Regulatory approvals are intricate processes that require careful attention. We are committed to meeting all necessary requirements to ensure the success of this acquisition,” he stated.
. He further added that the group remains optimistic about obtaining the necessary clearances within the stipulated extension period.
The affidavit submitted by the Hinduja Group elucidates that the deal’s closure is partly delayed due to intricate and ongoing negotiations with lenders for the Rs 7,300 crore borrowing. Besides, the ambiguities in the current foreign investment regulations have enforced a cautious approach towards compliance and execution of the transaction.
With the extension now under consideration, the financial community is keenly observing how this plays out. Analysts have highlighted that the involvement of large figures and reputed entities necessitates extraordinary diligence and thorough compliance with regulatory guidelines to avoid any potential legal or financial pitfalls.
Reliance Capital, an integral part of the Reliance Group founded by the late Dhirubhai Ambani, has been a significant player in the Indian financial services industry. Its acquisition by the Hinduja Group is anticipated to bring substantial market shifts and alterations in the competitive landscape.
For now, Anil Ambani holds his position, anticipating the conclusion of the acquisition. He remains steadfast in his commitment to navigate through the bureaucratic and regulatory requirements to bring this deal across the finish line. Industry experts suggest that while such delays are not uncommon in acquisitions of this magnitude, the stakes are exceptionally high given the size and scope of the deal.
If the Hinduja Group succeeds in acquiring the essential approvals within the extended timeline, it would mark a notable milestone in India’s corporate mergers and acquisitions history. Conversely, any further delays could potentially jeopardize the deal’s future, impacting stakeholders and investors alike.
As the deadline extension request is under review, the corporate world watches closely, understanding that the resolution of these hindrances will significantly impact the financial and industrial arena in India. For Anil Ambani and the Hinduja Group, the next few months will be crucial in defining the outcome of this high-stakes corporate negotiation.
