Hinduja Group emerges as highest bidder for insolvent Reliance Capital

27 Apr 2023 , 08:53 AM

In the second round of the auction on Wednesday, a Hinduja Group company placed the highest bid of Rs 9,650 crore to acquire the insolvent Reliance Capital, according to news reports. 

In the first round of the auction, which was held in December of last year, Torrent Investments’ offer of Rs 8,640 crore was more than the bid submitted by IndusInd International Holdings Ltd (IIHL).

According to news reports, Torrent Investments and Oaktree, the other two bidders, did not participate in the second round of bidding.

The minimum bid amount was set by the Committee of Creditors (CoC) at Rs9,500 crore for the first round, Rs10,000 crore for the second round, and an extra Rs250 crore for each successive round.

According to reports, the CoC also stipulated that all offers must include an upfront cash payment of no less than Rs8,000 crore. The IIHL bid of Rs9,650 crore meets this requirement in full.

After the Supreme Court granted the lenders permission to proceed with the extended challenge procedure in order to maximize the proceeds from the sale of Reliance Capital’s assets, the second round of the auction was held on Wednesday.

However, reports claim that the outcome of the SC’s ruling in the appeal brought by Torrent Investments will be a factor in any decision the CoC makes about the resolution of Reliance Capital.

After the initial auction, Reliance Capital’s resolution procedure became entangled in litigation.

The Hinduja Group firm submitted the post-auction bid after the first round was completed.

After the auction was over, IIHL made an all-cash amended bid of Rs9,000 crore as opposed to a December offer of Rs8,110 crore. Despite the bankers’ expressed desire to hold a second round of auctions.

As the highest bidder in the initial round of the auction, Torrent Investments is contesting this post-auction bid before the Supreme Court.

The amended bid from IIHL and the lenders’ choice to hold a second round of bidding in NCLT Mumbai were both contested by Torrent. The lenders of Reliance Capital appealed the NCLT’s decision, which favored Torrent.

In order to maximize their profit from the sale of Reliance Capital, the lenders were given permission by NCLAT, which was found in their favour, to enter a second round of auction.

The Supreme Court rejected Torrent’s request for a stay of the NCLAT ruling and permitted the lenders to proceed with the second round of the auction despite the NCLAT order being challenged by Torrent.

The National Company Law Tribunal (NCLT) Mumbai bench has, in the meantime, extended the deadline for concluding the resolution procedure of RCap by three months, to July 16.

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