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DPIIT Greenlights Rs 10,000-Crore Acquisition of RCAP by IIHL.

Economy Business | Dated: 27 Nov 2024

The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry (MoC&I), has granted approval for the Rs 10,000-crore acquisition of debt-laden Reliance Capital Limited (RCAP), part of Anil Dhirubhai Ambani Group, by Mauritius-based Indusind International Holdings Ltd (IIHL), a company of the Hinduja Group Limited (HGL).

🎯 Key Highlights:

  • - This approval completes all necessary regulatory clearances for the transaction. Earlier this year, IIHL had received approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), and stock and commodity exchanges.
  • - यह अनुमोदन लेनदेन के लिए सभी आवश्यक नियामक मंजूरी को पूरा करता है। इस साल की शुरुआत में, IIHL को भारतीय रिजर्व बैंक (RBI), भारतीय बीमा नियामक और विकास प्राधिकरण (IRDAI), और स्टॉक और कमोडिटी एक्सचेंजों से मंजूरी मिली थी।
  • - Regulations under Press Note 3 (PN3) of 2020 mandate government clearance for investments from entities or individuals connected to countries sharing a land border with India. This ensures compliance with security protocols for foreign investments.

💡 Other Important Facts:

  • (i) PN3 of 2020 is a policy introduced by the Government of India (Gol) to oversee and regulate Foreign Direct Investment (FDI) in Indian businesses. With this approval, IIHL can proceed with the transaction under the extended deadline of January 31, 2025. Failing to close the deal within this timeframe would require the Hinduja Group to return Rs 3,000 crore raised from investors, including High-Net-Worth Individuals (HNIs).
  • (ii) Reliance Capital Ltd (RCAP), a firm burdened with over Rs 40,000 crore in debt, faced governance concerns and payment defaults that led to intervention by the RBI in 2021.
  • (iii) The RBI dismissed the company's board and appointed Nageswara Rao Y as administrator to oversee the resolution process. Subsequently, bids for the company were invited in February 2022.

📚 Test Your Knowledge:

Recently, the DPIIT approved the Rs 10,000-crore acquisition of RCAP by which company?

Correct Answer: IIHL

🚀 Quick Recap: