Tag: authum investment

Authum Investment to buy Reliance Commercial Fin in ₹1,629-cr deal

Banking & Finance

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Authum Investment and Infrastructure is set to acquire Anil Ambani-led Reliance Commercial Finance (RCFL) on completion of the resolution process under the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019.

Lenders have approved the ₹1,629 crore bid placed by Authum in the meeting held on Thursday and letter of intent was issued in favour of the company’s bid.

The resolution will result in overall debt reduction of Reliance Capital by over Rs 9,000 crore.

Authum’s RP chosen for Reliance Commercial Finance

RCFL offers a wide range of products including loan against property, MSME/SME loans, infrastructure financing, education loans and micro financing.

Authum Investment and Infrastructure, a Non-Banking Finance Company has over 15 years of presence and net worth of about ₹2,360 crore as of June-end.

Authum is currently managed by a team of professionals with significant investment experience in domestic, public and private equity. Authum’s investment strategy is long term value creation through investments in listed companies, providing growth capital to unlisted companies, acquisition of financial assets, real estate investments and debt investments.

Further, the proposed acquisition of Reliance Commercial Finance strengthens business portfolio and enables to develop a single platform across multiple financial products and services in the NBFC sector, it said.

The acquisitions offer a growth opportunity with a blend of commercial finance, MSME/SME, affordable housing, loan against properties, retail and consumer finance along with strong digital and technology play to generate higher yields.

Voting on Reliance Commercial Finance’s debt resolution underway

These segments are major drivers of the economy with significant unfulfilled demand, it said.

Authum is geared up to meet its financial commitment to the lenders of RCFL under the LoI.

The company will leverage on RCFL customer base, employees, processes, licenses, branch network and digital platform with an aim to create a niche lending platform, it said.

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Authum Investment likely winner for Reliance Commercial Finance

Personal Finance

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After the resolution of RCF, parent firm Reliance Capital may reduce total debt of Rs 9,000 crore from its books, sources said.

By Ankur Mishra

Lenders to Reliance Commercial Finance (RCF) are understood to have voted in favour of Mumbai-based NBFC Authum Investment and Infrastructure’s bid, sources close to the development told FE. Authum’s Rs 1,585-crore bid implies around 20% recovery for financial creditors on a total exposure of Rs 7,688 crore. This is the second Anil Ambani group firm which is likely to be acquired by Authum Investment and Infrastructure after lenders in June declared the NBFC winner for acquiring Reliance Home Finance.

The Alpana Dangi-promoted Authum Investment is in the business of investing in shares and securities. The company, which has a net worth of over Rs 2,400 crore, is also engaged in financing activities, according to its website.

After the resolution of RCF, parent firm Reliance Capital may reduce total debt of Rs 9,000 crore from its books, sources said.

The lenders had earlier extended the inter-creditor agreement (ICA) for RCF till July 31, 2021 for resolution. According to June 7 circular of the Reserve Bank of India, lenders need to extend the time period of the pact if an account has not been resolved within 180 days of signing of the ICA. The lenders had signed the ICA to resolve Reliance Commercial Finance in July 2019.

According to the website of RCFL, it has been re-branded as Reliance Money, and has assets under management worth Rs 11,000 crore. The company is a 100% subsidiary of Reliance Capital. RCFL offers financial products, including small and medium enterprise loans, loans against property, infra financing, agriculture loans and supply chain financing.

The net loss of Reliance Commercial Finance widened to Rs 1,417 crore during the March quarter, compared with Rs 852 crore in the corresponding quarter last year. The total income declined 12% year-on-year to Rs 293 crore.

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