Hinduja Group is actively in conversations with private credit funds to secure around $800 million in funding in a bid to acquire Reliance Capital. Considering that the involved parties have not yet reached a formal agreement, the terms of the deal remain subject to alterations, as reported by Bloomberg.
Given the current global economic uncertainties, including the impact of events like the COVID-19 pandemic, many conglomerates are reassessing their debt structures. Hinduja might be considering adjustments in its debt portfolio, possibly to reduce interest rates or diversify its debt holdings.
This development comes after Torrent Investment has, for the second time, approached the Supreme Court to seek a stay on the resolution plan submitted by the Hinduja Group to acquire bankrupt Reliance Capital. Torrent has made an urgent appeal for the court's intervention in the second round of asset auctions for Reliance Capital, scheduled for April 26.
Reliance Capital, once under the ownership of former billionaire Anil Ambani, transformed into a shadow bank. In 2021, the central bank assumed control of the institution due to a succession of defaults by more than five significant non-bank financial firms within a relatively short time frame.
Moreover, India has emerged as a hub for private credit activity, driven partly by regulatory constraints preventing local banks from providing loans for mergers and acquisitions. Research conducted by the Global Private Capital Association, a representative body of investors, has indicated that over the past five years, India has recorded the highest investment volume in Asia.