Hinduja aims for value creation of $35-40 bn from the BFSI sector by 2030

Hinduja Group is betting big on the Banking, Financial Services, and Insurance (BFSI) sector, targeting to have a value creation of USD 35-40 billion in the next five to seven years by adding more verticals to fill up the gaps, said Ashok P Hinduja, Chairman of Group Companies (India).

The Hinduja family-owned group is now looking at BFSI, besides the mobility, and energy sectors as the growth driver for the next decade.

The group, which owns IndusInd Bank, Hinduja Leyland Finance and Hinduja Bank (Switzerland), is diversifying and has plans to get into the new tech, digital and fintech as part of its new phase of growth and fill gaps through acquisitions to have complete offerings in the BFSI sector, said Hinduja in a selected media round table here.

"So the first phase will start and the objective of the holding structure, which is a Mauritius-based IndusInd International, is to grow into the BFSI sector to complete the full stack," he said.

Besides, it is raising promoter's stake in IndusInd Bank after RBI modified its policy for increasing promoters's stake in private banks up to 26 per cent and and is confident to acquire debt-ridden Reliance Capital by November end of this year.

Ashok Hinduja (73) said the acquisition of Reliance Capital will take the group in sectors such as life insurance, general insurance and health insurance besides the ARC (asset reconstruction company) and stock broking.

"So that will cover part of it, balance left out is the mutual fund, the wealth management that is also we are on a lookout for," said Hinduja adding "hopefully by the end of this financial year, mostly 95 per cent of the BFSI sector will be covered."

"The plan for BFSI is all clear, is all known that where this whole sector will finally go... (We are) targeting to touch anywhere between USD 35 to 40 billion value creation on that," Hinduja said.

When asked about the time frame, he replied:" I think a minimum of five years to 2030 (7 years)."

However, he also added that every entity has its own board, which will take their view, take their stand and then they will proceed accordingly.

Hinduja further said once Reliance Capital is acquired it will remain as a separate entity.

"The common parent is the same, but every entity is a separate operating entity," he said adding Reliance Capital's general insurance is run separately.

While in its life insurance business, Nippon has a 49 per cent partnership. In health and general insurance, it has 100 per cent ownership.

"So these are value creations after two, three years to go for the IPOs," he said.

Hinduja group's IndusInd International Holdings Ltd (IIHL) has emerged as the sole bidder for Reliance Capital and it is pitched in a legal battle with Torrent Investments, which left out in the second round of auction.

The matter is currently before the Supreme Court, where the Ahmedabad-based group has moved for the second time to seek a stay on approval of the resolution plan of the Hinduja Group by NCLT.

On the mutual funds that the group is targeting to acquire, Hinduja without naming any company said: "There are some opportunities which are already available."

"The market is big. Everybody has the opportunity to come in, everybody will have its own pie," he said, adding "In the BFSI sector, whatever be missing, will be added at an appropriate time and opportunity."

Over increasing stake in IndusInd Bank, Hinduja said now the Reserve Bank of India (RBI) has modified the policy and allowed promoters of private banks to hold up to 26 per cent stake in banks.

"Now after 26 per cent, we have approached. They have given us consent that yes, as per the policy you can go. So we have already started raising the capital, and we will get about over a billion dollars to go into phases, our first capital raise which was the treasury shares was there. So we will be completing that on the 15th of this November," said Hinduja.