IndusInd International Holdings (IIHL), a company based in Mauritius, is planning to raise ₹3,000 crore by issuing non-convertible debentures (NCDs) with an interest rate of 14.50%. These NCDs will mature in 2028. The money will help fund IIHL’s purchase of Reliance Capital, which was promoted by Anil Ambani.
The NCDs will be zero-coupon, which means they won’t pay regular interest, but will be senior secured, listed, rated, and redeemable. The bidding for these NCDs started recently and will close on September 16, 2024. The debt will have a tenor of 42 months.
Hinduja Group’s Total Fundraising
The Hinduja Group, which owns IIHL, aims to raise a total of ₹7,300 crore, dividing it between local and international fundraising efforts. Some of the funds will be raised from private credit funds with expected returns of 15%. Companies like 360 One and Barclays are assisting with the fundraising.
Reliance Capital Acquisition
The Hinduja Group had earlier submitted a bid of ₹9,650 crore to buy Reliance Capital (RCap), which was accepted by the creditors’ committee in July 2023. Out of this, ₹2,700 crore is being brought in as equity by the Hinduja Group.
The acquisition follows a lengthy process. The Reserve Bank of India had taken control of Reliance Capital in November 2021 after the company defaulted on ₹40,000 crore in debt and faced governance issues.
IIHL’s New Structure
In May 2024, IIHL restructured its operations by setting up four new entities in India, including Cyqure India, which will hold Aasia Enterprises. Ashok, Harsha, and Shom Hinduja will be shareholders in the holding company.
Some of the raised money will be secured through a first-ranking charge on various assets, including cash flows from insurance companies and proceeds from asset sales. Care Ratings mentioned this in a note from July 2024. IIHL will also need to maintain a 51% ownership in both IIHL BFSI (India) and Reliance Capital as part of the NCD agreement.
The insolvency tribunal, which is overseeing the acquisition, has ordered IIHL to pay interest on the ₹7,300 crore debt from August 8, 2024, until the entire payment is completed.
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