`David` Torrent in battle with `Goliath` Hindujas for Reliance Capital buy out
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The IIHL (Hinduja Group) and Torrent are in the final race for Reliance Capital resolution process.
IIHL, a part of Hinduja Group, is the highest bidder with a bid value of Rs 10,000 crore which includes an upfront cash offer of Rs 9,000 crore.
In comparison, the value of Torrent's resolution plan is Rs 8,640 crore, which the company bid at the Challenge Mechanism conducted by the COC on December 21, 2022.
Hinduja is one of the leading conglomerates with presence in multiple sectors of the economy including finance, automobiles, oil & chemicals, IT, media, power, healthcare, trading etc.
The gross revenue of the Hinduja Group is over Rs 58,000 crore and PAT of Rs 7,600 crore. The total assets of the group are 4.62 lakh crore. The market capitalisation of the listed entities of Hinduja Group is more than Rs 1.46 lakh crore.
IndusInd Bank, owned by Hinduja Group, is one of the leading banks in India, with presence across the country and a customer base of over 28 million.
In addition to IndusInd Bank, Hinduja Group also has Hinduja Leyland Finance and Hinduja Bank (Switzerland) Ltd. Hinduja Leyland Finance is one of the leading vehicle finance NBFC in India.
The strong presence of Hinduja Group in the financial sector offers perfect synergy for the Reliance Capital. Also, with such a the strong financial strength of the group, arranging funds for the acquisition of Reliance Capital will not be difficult for IIHL.
Hinduja Group's presence in financial sector and financial strength gives IIHL the lead over Torrent.
Torrent Group, on the other hand, has no experience and presence in the financial sector.
The Ahmedabad-based group is primarily into pharma, power, and city gas distribution businesses.
The gross revenue of Torrent Group is Rs 24,000 crore, with a group PAT of only Rs 1,312 crore.
It is not yet clear how a group which has a total revenue of Rs 24,000 crore will arrange the funds for the acquisition of almost Rs 10,000 crore.
Torrent Group already has a total debt of Rs 14,514 crores, which is more than 50 per cent of its group revenue.
The NCLT Mumbai will resume the hearing in Reliance Capital resolution matter on Monday.
