IIHL sets sights on $50 bn valuation by 2030: Chairman Ashok Hinduja

The Hinduja Group arm will raise stake in IndusInd Bank to 26%; IIHL, Aasia Enterprises acquisition of Rel Cap to meet Irdai norms

Mauritius-based IndusInd International Holdings (IIHL) is targeting a valuation of $50 billion by 2030 with the acquisitions of the debt-ridden Reliance Capital and Invesco Mutual Fund, even as its investments grow in IndusInd Bank and other companies across the world, IIHL Chairman Ashok Hinduja said.

In a media interaction on Friday, he said IIHL was in the process of increasing its stake from 15 per cent to 26 per cent in IndusInd Bank and was looking to acquire smaller-sized banks in various European countries.

“We have received the letter from the Reserve Bank of India (RBI), which clearly (asked us) to follow the process (to raise stake in IndusInd Bank), (in accordance with) guidelines. The various forms have been completed. The same has gone to IndusInd Bank. The bank has also cleared it through its board. Now it has gone to the regulator. I am hoping that maybe in a week or two, we should get their response,” Hinduja said.

“Once we get that, we’ll start the process of raising capital through the bank or through the market or we’ll create a combination,” he added.

IIHL, which had a net worth of $2.04 billion as of March this year, will increase its stake in tranches in IndusInd Bank, whose market valuation was Rs 1.15 trillion as of Friday, with its share price closing at Rs 1,482 a share.

“IIHL will be investing in the bank within 24 hours of getting the final approval,” Hinduja said, adding that due diligence was currently going on for the acquisition of smaller banks in Switzerland, Liechtenstein, Germany, and Luxembourg.

“If everything goes well, we can make an offer for the foreign bank,” he said. In April, IIHL acquired a 60 per cent stake in Invesco Asset Management India to deepen its presence in the para-banking space.

IIHL, Hinduja said, was planning to list its shares on Afrinex Exchange to give an exit to its shareholders.

“IIHL has over 600 high net worth shareholders and they are committed to IIHL. Initially, they invested $1 per share and their $1 has already paid off two times. They have got cash bonuses long back. So their holding is a super bonus for them -- as a good investment. They are getting dividends. And, whenever funds are required, up till now more than $500 million of capital raise has happened in IndusInd Holding. Now this happened because shareholders have trust and confidence. So, their $1 share is now worth $48,” he said.

On the ownership of Hinduja Bank of Switzerland, Hinduja said, the late SP Hinduja was the owner and it is under probate in accordance with the will.

IIHL, Aasia ready with cash to pay for Rel Cap

IIHL, which has won the race to buy Reliance Capital with an all-cash offer of Rs 9,661 crore, is expecting to get the approval of the insurance regulator Insurance Regulatory and Development Authority of India (Irdai) for the acquisition soon, Hinduja said, adding that IIHL had arranged Rs 7,500 crore in debt and the rest as equity for the acquisition. Reliance Capital, earlier owned by industrialist Anil Ambani, filed for bankruptcy in 2021 after it defaulted on its loans, and IIHL and Aasia Enterprises won the bid to buy the firm.

Aasia Enterprises, an Indian entity owned by Ashok Hinduja and family, is a bidder along with IIHL for the insurance firm, which would meet the Irdai’s regulations, Hinduja said. There were reports that Irdai had questioned IIHL’s proposal over exceeding the FDI (foreign direct capital) ceiling of 74 per cent in insurance, following the transfer of the stake of Reliance Capital to IIHL in the life insurance venture. Nippon Life of Japan currently owns a 49 per cent stake in the life insurance venture. According to Hinduja, Aasia Enterprises, a co-bidder, is owned by Indian passport holders and hence it will not breach any insurance guidelines.

“The equity is bought by IIHL through its subsidiary, and through an investor, who is investing in it. They have bought the shares. An investor has bought the funds and it is going as equity. So, 25 per cent is equity, 75 per cent is debt. That is the combination,” Hinduja said.

The National Company Law Tribunal on February 27 this year approved IIHL’s Rs 9,661 crore offer for Reliance Capital and asked the Hinduja firm to pay the lenders within three months of the order and getting all the approvals. “We will pay the lenders within 24 hours of getting the requisite approvals,” Hinduja said.

“Once we take over Reliance Capital, we will sell its real estate worth Rs 250 crore and grow the insurance and health insurance, broking and asset reconstruction businesses,” Hinduja said. Reliance Capital will be the core investment company with a holding in three insurance companies, an ARC, and the broking business.

IndusInd Bank, which is a separate entity with an independent board, can go ahead with its own insurance plans, if any, Hinduja said.

He said Reliance Capital had a Rs 40,000 crore tax loss, which itself would bring more business into that company to take advantage of the tax loss. It will relaunch the health insurance business on this account.

Reliance Capital will undergo a brand change once the acquisition is over, Hinduja said, adding that all shares including ESOPs (employee stock options) issued earlier would be extinguished in accordance with the insolvency law.

IIHL'S GROWTH PLAN

To raise IndusInd Bank stake to 26%

Waiting for Irdai approval to complete RCap buy; has arranged Rs 7,500 crore in debt and rest as equity

Planning to list shares on Afrinex Exchange to give an exit to shareholders

Looking to buy smaller-sized banks in various European countries