Shares of IndusInd Bank were down after the competition regulator gave the lender the green light to acquire a controlling stake in the troubled Reliance Capital.
What Happened: The Competition Commission of India (CCI) announced on Wednesday its clearance of the proposed stake acquisition in Reliance Capital by IndusInd International Holdings Ltd, IIHL BFSI (India) and Aasia Enterprises.
The transaction involves the acquisition of a controlling stake in Reliance Capital by the aforementioned entities, positioning IndusInd Bank and others to hold a significant stake in Reliance Capital post-transaction.
Reliance Capital, an RBI-registered non-banking, non-deposit-taking systemically important company, operates within the financial services sector. The CCI, in a post on social media platform X, stated, “Commission approves the proposed acquisition of the control/stake in Reliance Capital Limited by IndusInd International Holdings Limited, IIHL BFSI (India) Limited, and Aasia Enterprises.”
Laying The Groundwork: The move follows the capital-raising plan of Hinduja Group-owned IndusInd International Holdings (IIHL), the promoter of IndusInd Bank, amounting to $1.5 billion. The funds are earmarked for the planned acquisition of Reliance Capital and an increase in stake in the lender.
IIHL aims to raise its holding in Reliance Capital from the current 15% to 26%. In June, IndusInd Bank’s revised bid of ₹9,661 crore for Reliance Capital gained acceptance from lenders of Reliance Capital.
In November 2021, due to payment defaults and governance concerns, the Reserve Bank of India (RBI) superseded the board of Reliance Capital in the matter of the acquisition.
Price Action: Shares of IndusInd Bank were down 0.19% at ₹1,594.75 near the start of trade on Thursday.
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