In 2nd Round, Hinduja Group Emerges As Biggest Bidder With Rs 9,650 Cr For Reliance Capital

A Hinduja Group entity emerged as the highest bidder in the second round of auction on Wednesday, with an offer of Rs 9,650 crore to take over debt-ridden Reliance Capital. 

IndusInd International Holdings Ltd (IIHL)'s bid is bigger than Torrent Investments' bid of Rs 8,640 crore in the first round of auction in December last year.

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

The Committee of Creditors (CoC) had set a minimum bid amount of Rs 9,500 crore for the first round, Rs 10,000 crore for the second round and Rs 250 crore for subsequent rounds.

According to the reports, the CoC also stipulated that all bids must include a minimum of Rs 8,000 crore in upfront cash payment and the IIHL bid of Rs 9,650 crore is an all-cash bid.

On Wednesday, the Supreme Court allowed the lenders to proceed with the extended challenge procedure in order to optimise the recovery from the sale of Reliance Capital's assets.

As per the reports, any decision by the CoC on Reliance Capital's resolution will be contingent on the outcome of the Supreme Court's decision in the appeal filed by Torrent Investments.

After the first round of bidding, Reliance Capital's settlement procedure became bogged in litigation.

Following the conclusion of the first round, the Hinduja Group firm filed a bid after the auction deadline.

After the auction, IIHL presented an all-cash amended bid of Rs 9,000 crore, up from an offer of Rs 8,110 crore in December. This was done despite lenders' expressed desire to organise a second auction round.

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

Torrent opposed IIHL's increased bid as well as the lenders' intention to hold a second round of auction in Mumbai at the NCLT. The NCLT ruled in favour of Torrent and Reliance Capital's lenders appealed the decision to the NCLAT.

The NCLAT gave the verdict in favour of the lenders, allowing them to proceed with a second round of auction in order to optimise their recovery from the sale of Reliance Capital.

Torrent appealed the NCLAT judgement to the Supreme Court, which refused to postpone the order, allowing the lenders to proceed with the second round of auction.

Meanwhile, the National Company Law Tribunal (NCLT) Mumbai bench has extended the deadline for completing the RCap resolution procedure by three months to 16 July.

Due to payment failures and major governance difficulties, the Reserve Bank of India (RBI) superseded Reliance Capital's board on 29 November 2021.

The RBI appointed Nageswara Rao Y as the administrator of the firm's Corporate Insolvency Resolution Process (CIRP).

Reliance Capital is the third significant non-banking financial corporation (NBFC) against which the central bank has filed for bankruptcy under the IBC. Srei Group NBFC and Dewan Housing Finance Corporation (DHFL) were the other two.

Following that, the central bank filed an application with the NCLT's Mumbai bench to initiate CIRP against the company.

The RBI-appointed administrator requested expressions of interest for the sale of Reliance Capital in February of last year.