IndusInd International Holdings (IIHL), based in Mauritius, has set ambitious targets for its valuation following its recent acquisitions. Let’s delve into the details of IIHL’s plans and acquisitions, along with its future prospects.
Acquisition Plans and Valuation Targets
IIHL is eyeing a significant increase in its valuation, aiming for $50 billion by 2030. This goal follows its acquisitions of Reliance Capital (RCAP) and Invesco Mutual Fund. Initially expecting a valuation of $30 billion, IIHL has revised its targets upward, banking on the strategic acquisitions to bolster its position in the market.
Regulatory Hurdles and Financial Preparedness
Despite its ambitious plans, IIHL faces regulatory hurdles, particularly concerning the acquisition of Reliance Capital. The Insurance Regulatory and Development Authority of India (Irdai) is yet to provide its nod for the acquisition, valued at Rs 9,650 crore. IIHL’s chairman, Ashok Hinduja, remains hopeful of receiving the necessary approvals soon, expressing confidence in the company’s ability to fulfill its financial obligations promptly.
Financial Arrangements and Funding Sources
To finance the acquisition of Reliance Capital, IIHL has secured Rs 7,500 crore from various banks. While Hinduja refrains from disclosing specific details about the participating banks, he assures that there is substantial interest among lenders to provide funding for the acquisition. Additionally, IIHL plans to raise the remaining amount through equity, demonstrating its commitment to completing the deal within the stipulated timeframe.
Strategic Divestments and Expansion Plans
Post-acquisition, IIHL intends to divest its real estate investments, generating approximately Rs 250 crore in proceeds. This strategic move aligns with IIHL’s focus on consolidating its core businesses, particularly in the insurance sector. With plans to strengthen its general and life insurance arms, IIHL remains engaged with its Japanese partner, Nippon, exploring avenues for collaboration and expansion.
Expansion into Asset Management and Future Listings
IIHL recently ventured into the asset management space through the acquisition of a majority stake in Invesco Asset Management India. This strategic move positions IIHL to capitalize on the growing demand for asset management services in India’s financial markets. Looking ahead, IIHL contemplates listing on the fundraising platform Afrinex in the coming years, signaling its intent to tap into diverse funding sources for future growth initiatives.
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