The resolution process of Reliance Capital (RCap) is inching to a close, with the debt-laden firm getting the approval of the Reserve Bank of India (RBI) for the bid placed by the Hinduja Group. However, it needs various approvals —including those from the Supreme Court and insurance regulator IRDAI—for completion of the insolvency process.
The administrator of the RCap’s insolvency proceedings has received a no-objection letter dated November 17 from the RBI, the former Anil Ambani company said in a regulatory update on Friday.
While RBI approval is a pre-requisite, the process needs approvals from the Insurance Regulatory and Development Authority of India (IRDAI), National Company Law Tribunal’s (NCLT) Mumbai bench and the Supreme Court.
A ‘letter of urgency’ petition filed by Torrent Investments, a Torrent Group company, which had sought the apex court’s intervention for an “urgent hearing and final disposal of all pending appeals”, on October 3, is pending before the Supreme Court. The firm, a bidder in the first round of auctions, had also challenged the second round of auctions convened for the sale of RCap’s assets.
In June, RCap’s lenders voted in favour of the resolution plan submitted by the Hinduja Group with 99.6% of the total votes. As per the plan, the lenders were to receive Rs 10,000 crore from IndusInd International Holdings (IIHL), the company through which the Hinduja Group placed its bids, which includes Rs 9,661 crore of upfront cash.
This plan has to be approved by the NCLT, and with RCap having presence in insurance through its subsidiaries, IRDAI’s endorsement is also mandatory.