RBI grants Indiabulls core investment company registration

The Reserve Bank of India has granted Indiabulls Limited a certificate of registration to operate as a Core Investment Company, bringing the firm under the central bank's specialized regulatory framework for holding companies.

But the new status might be short-lived. In a regulatory filing, Indiabulls disclosed that it is currently evaluating whether the rules actually apply to its operations. If the company decides the framework does not fit, it plans to hand the licence back to the regulator.

"The said Certificate will be surrendered, in the event of its non-applicability, which is being evaluated by the Company," Indiabulls stated in its exchange filing.

What the registration means

A Core Investment Company, or CIC, is a specialized class of non-banking financial company. Unlike traditional shadow banks, a CIC does not offer retail loans or commercial banking services to the public. Instead, its primary function is to hold shares and debt in its own group companies.

To qualify for this status under RBI regulations, an entity must hold at least 90 percent of its net assets in the form of investments or loans to its group companies. Furthermore, at least 60 percent of its net assets must be held specifically in the equity shares of these group entities.

The registration is a classification of how Indiabulls holds and manages its corporate assets rather than an expansion into new commercial financial markets.

Rebranding and next steps

Indiabulls Limited, which previously operated under the name Yaari Digital Integrated Services Limited, did not report any immediate financial impact from the regulatory change.

In its disclosure, the firm noted that the validity period of the registration certificate was marked as "not applicable." The company has not provided a timeline for when it will complete its evaluation of whether to keep or surrender the registration.