A consortium of Cosmea Financial and Piramal Group has pulled out of the race to acquire assets of Reliance Capital (RCap), alleging that the changes in the resolution process have made the acquisition unviable.

The exit of the consortium, which was the highest bidder for RCap as a core investment company (CIC), comes a day ahead of the e-auction process. Following the exit, the race for RCap’s assets has been reduced to three players – Hinduja Group, Torrent Group and Oaktree Capital – while the e-auction would go according to the schedule, sources close to the development said.

According to the new date, the e-auction of RCap is scheduled to begin on Wednesday. The consortium has also informed the administrator of its decision to walk away from the resolution process, sources added.

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The recent changes in the bidding process have “significantly altered” the entire bidding process, the consortium informed the administrator.

Earlier on December 13, RCap’s committee of creditors (CoC) had hiked the auction base price by nearly 25% to Rs 6,500 crore. Initially, the base price was fixed at Rs 5,231 crore, which was the highest bid placed by the Cosmea-Piramal consortium. The deadline for the e-auction was also moved to December 21 from the earlier December 19.

Further, the increments in the auction process for the second and third rounds were also set at Rs 1,000 crore each, which the bidders felt was “very steep”. An increment of Rs 500 crore was set for round four and Rs 250 crore for every subsequent round.

This would mean that the required bids should be at least Rs 7,500 crore, Rs 8,500 crore, Rs 9,000 crore and Rs 9,250 crore for the first, second, third and fourth rounds.

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The consortium was of the opinion that the changes in the process were not only unreasonable and arbitrary but also unrealistic and untenable, sources added.

Bidders had also sought information on the entire process, including the names and ranking of the bidders, which were also not provided. The bidders had alleged these were contrary to the e-auctions conducted in the country, including the spectrum auction and those for solar and wind power projects.

Cosmea-Piramal’s bid of Rs 5,231 crore for RCap as a CIC included an upfront payment of Rs 4,250 crore. The net present value (NPV) of the Cosmea-Piramal offer was Rs 5,000 crore. Hinduja Group came second with a Rs 5,060-crore bid, which included an upfront payment of Rs 4,100 crore, while its NPV offer was Rs 4,800 crore.

Torrent had quoted Rs 4,500 crore, with an upfront payment of Rs 1,100 crore and an NPV of Rs 4,200 crore. Oaktree had quoted Rs 4,200 crore, with an upfront payment of Rs 1,000 crore and an NPV of Rs 2,600 crore.