IIHL gets Rs 50K cr financial offers via overseas lenders

MUMBAI: The Hinduja Group arm, IndusInd International Holding Ltd. (IIHL), which emerged the highest bidder for Reliance Capital in the recently concluded auction, is firmly in the driver’s seat as the company has already received Rs 50,000 crore worth of funding offers from the leading overseas lenders to fund the acquisition.

Some of the leading banks and financial institutions who have extended commitment letters to IIHL are JP Morgan, Standard Chartered Bank, Barclays, Apollo Global Management, Varde Partners, and Farallon Capital.

IIHL plans to fund the Rs 10,000 crore Reliance Capital acquisition through a combination of debt and equity. The debt equity ratio is estimated to be 80:20.

The Rs 50,000 crore commitment from the leading overseas banks and FIs reflects the confidence of the international investors in the IIHL’s acquisition of Reliance Capital.

IIHL is offering Rs 10,000 crore for Reliance Capital, while the liquidation value (LV) and fair value (FV) of the company are pegged at Rs 13,000 crore and Rs 17,000 crore respectively.

The huge difference in the acquisition cost and fair value of Reliance Capital makes the deal highly attractive for the Hinduja Group and lenders as well.

The Mauritius-based IIHL is a holding investment arm of the Hinduja Group, headquartered in the UK. Ashok P Hinduja is the chairman of IIHL. Apart from various investments in the multiple sectors and companies, the IIHL holds 12.58 per cent equity stake in the group owned IndusInd Bank itself. At the current market capitalization of around Rs 88,000 crore, the value of IIHL’s holding in the IndusInd Bank is estimated around Rs 11,000 crore. With a net asset value of Rs 22,00 crore the IIHL has investments in a wide range of services & sectors, including IT, housing loans, vehicle finance, and media services.