Hindujas chart ambitious growth plan in finance sector

The Hinduja Group plans to double down on the banking, financial service, and insurance (BFSI) sector, with the aim of creating up to $40 billion in value over the next seven years.

The transnational conglomerate plans to add more verticals in new tech, digital, and fintech sectors, Ashok P. Hinduja, chairman of Hinduja Group Companies (India), said this week.

To begin with, the goal of the group’s Mauritius-based holding company, IndusInd International Holdings Ltd (IIHL), is to expand in the banking and financial sector to offer a complete range of services, Hinduja said.

The group is planning to raise its ownership in IndusInd Bank following a recent RBI policy change that allows up to a 26% stake for founders, Hinduja added.

As on 31 March, the promoters own 15.15% of IndusInd Bank, which was started in 1994 by late UK billionaire Srichand P. Hinduja and other overseas Indians.

Hinduja also sounded optimistic about acquiring debt-laden Reliance Capital (RCap) by the end of November, as reported by a section of the Indian press following a media round-table.

IIHL, the parent entity of IndusInd Bank, emerged as RCap’s sole bidder earlier this year. IIHL’s rescue plan for RCap is awaiting final nod from the National Company Law Tribunal (NCLT).

Acquiring RCap would expand the group’s reach into sectors such as life insurance, general insurance and health insurance as well as debt recovery and stock broking, Hinduja said.

IndusInd Bank chief executive officer Sumant Kathpalia last week suggested that the lender may consider cross-selling insurance products from RCap, “provided they meet customer requirements and align with IndusInd’s strategic interests”.

Earlier this month, Bloomberg reported that the group was looking for alternative means of financing, including private credit, to fund its ₹9,661 crore ($1.16 billion) all-cash offer to acquire RCap.

The Insurance Regulatory and Development Authority of India (IRDAI) had earlier rejected the collateral offered by the group to raise the funds.

“Funds are all queued up. We have only to select and finalize. We will wait for the opportunity. As and when NCLT clears our proposal, we are hopeful that this transaction will be completed during this financial year,” Hinduja told CNBC TV18 in an interview this week.

Meanwhile, the group aims to grow its international footprint.

Gopichand P. Hinduja, who heads the European arm of Hinduja Group, unveiled the group’s plan to sign global partnerships in Saudi Arabia, the United Arab Emirates, China, and the US.

The conglomerate also envisages greater potential for collaboration with Africa and India in sectors such as public transportation, Leyland vehicle exports, and Gulf oil lubricants, he said.

“We believe Africa will be the next big market for bus rapid transit, Leyland vehicle exports, and Gulf Oil Lubricants. We’re exploring many opportunities for growth and partnerships there,” he said.

The Hindujas operate in 11 sectors: automotive, oil and specialty chemicals, banking and finance, IT and ITeS, cybersecurity, healthcare, trading, infrastructure project development, media and entertainment, power, and real estate.

Hinduja said they are continuing with their Ashok Leyland plant project in Lucknow, under which the company will spend ₹1,000 crore to build a bus factory.