Shares of Reliance Capital surged 4.9 percent on Friday, June 30, following the Committee of Creditors (CoC) approval of Indusind International Holdings Ltd's (IIHL) resolution plan.
This approval marks the conclusion of the prolonged insolvency resolution process for Reliance Capital, providing a definitive resolution for the troubled financial services company.
The resolution plan presented by Indusind International Holdings Ltd (IIHL), the investment arm of the Hinduja Group, garnered strong support from lenders.
With an overwhelming majority, 99.6 percent of the lenders voted in favor of IIHL's resolution plan for Reliance Capital, CNBC TV-18 reported.
During Friday’s trade, the stock opened at a price of Rs. 9.36 per share against the previous close of Rs. 8.92 per share on BSE.
The stock touched a 52-week-high of Rs. 18.45 on September 08, 2022 and a 52-week-low of Rs. 7.65 on April 03, 2023, indicating that at the current level, the stock is trading over 22.3 percent above its 52-week low and 97 percent below its 52 week high.
The stock has grown nearly 5.7 percent in the last one month. However, in the past one year, it has declined by almost 23 percent. Moreover, the stock yielded a negative return of over 97 percent in the last five years.
Reliance Capital is currently dealing with claims amounting to ₹25,334 crore from secured and unsecured financial creditors under the Insolvency and Bankruptcy Code (IBC).
As part of the Insolvency and Bankruptcy Code (IBC) proceedings, Indusind International Holdings Ltd (IIHL) has put forward a resolution plan to acquire Reliance Capital for a sum of ₹9,661 crore in upfront cash.
In addition to this, Reliance Capital holds a cash balance of approximately ₹350-400 crore, which will be distributed among the lenders. The comprehensive recovery plan is anticipated to yield a total recovery of around ₹10,000 crore for the lenders, including the cash available with the company.
The Administrator of Reliance Capital is set to submit the resolution plan proposed by Indusind International Holdings Ltd (IIHL) to the National Company Law Tribunal (NCLT) in Mumbai for the final approval. This step is expected to occur next week, paving the way for the conclusive endorsement of the resolution plan.
Reliance Capital Limited is an India-based non-banking financial services company. The company is primarily engaged in the finance and investment activities. Its segments include finance and Investments, general insurance, life insurance, commercial finance and others.