These NCDs, set to be zero-coupon, senior secured, listed, rated, and redeemable, will be used to finance IIHL’s acquisition of Anil Ambani-promoted Reliance Capital (RCap). The issuance will have a 42-month tenor, with bidding open and closing on September 16, 2024.
The Hinduja Group, looking to raise a total debt of ₹7,300 crore, had split its fundraising efforts into domestic and overseas segments, with plans to raise part of it from private credit funds, offering returns of around 15%. 360 One and Barclays are helping in the fundraising as reported.
The acquisition of RCap follows a long process, with the committee of creditors approving the Hinduja Group’s ₹9,650 crore bid in July 2023. Around ₹2,700 crore is equity brought in by the Hinduja group. The Reserve Bank of India took control of RCap in November 2021 due to governance issues and defaults on ₹40,000 crore in debt.
IIHL changed its structure in May 2024 by introducing four India-based entities, including Cyqure India, which will act as the holding company for Aasia Enterprises, with Ashok, Harsha, and Shom Hinduja as shareholders.
Part of the raised funds will be secured by a first-ranking charge on assets, including cash flows from underlying insurance companies and proceeds from asset sales, as per Care Ratings’ July note. Also, IIHL will have to maintain a 51% shareholding in IIHL BFSI (India) and RCap as part of the NCD covenant.The insolvency tribunal is overseeing the prices and has directed IIHL to pay interest on the ₹7,300 crore debt component from August 8, 2024, until full payment is made.
