Hinduja Group launches bond sale worth Rs 7,300 crore to acquire capital of Reliance

According to Bloomberg, citing confidential sources, Hinduja Group plans to raise around ₹ 7,300 crore (equivalent to USD 873 million) through the issuance of two rupee bonds. This financing initiative is part of Reliance Capital’s acquisition financing strategy.

Barclays Plc and 360 ONE have been appointed as arrangers and underwriters of the bond issue. They started the syndication process last week to attract investors, aiming to complete the deal within a month.

According to the report, representatives from Hinduja Group, Barclays and 360 ONE did not respond to requests for comment.

Speculations about financing

According to reports, private credit funds are in talks with the organizers regarding the subscription of bonds, which is another element of the financing strategy.

This development comes after months of speculation on how Hinduja Group would finance its acquisition of Reliance Capital (R-Cap).

Background on trust capital

Reliance Capital, previously controlled by Anil Ambani’s group, faced management issues and payment arrears, leading to a change in the Reserve Bank of India (RBI) board in November 2021. RBI appointed Nageswara Rao Y as administrator and invited bids for takeover of the company in February 2022.

Four offers were initially submitted, but all were rejected by creditors due to low valuations. Subsequently, Hinduja Group’s subsidiary IndusInd International Holdings (IIHL) won the tender through the challenge mechanism.

NCLT proceedings

Meanwhile, the National Company Law Tribunal (NCLT) has deferred IIHL’s request to extend the completion of Reliance Capital resolution till June 25. The tribunal is scheduled to resume hearings in the case on the same day.

IIHL has requested an extension of 90 days from May 27, 2024 to implement the approved resolution plan under the Insolvency and Bankruptcy Code.