The Hinduja Group, the sole bidder for Reliance Capital (RCap), has offered to infuse another Rs 350 crore into the debt-ridden company, including in its subsidiary Reliance General Insurance Company (RGICL), increasing its total bid value to Rs 10,000 crore.
IndusInd International Holdings (IIHL), the company through which the Hinduja Group placed its bids, has offered to invest Rs 300 crore into RGICL and another Rs 50 crore for the certain items that were not part of the insolvency proceedings, sources close to the development said.
Hindujas have offered to provide the entire amount in upfront cash, they added. IIHL is slated to make a presentation on the additional investment it intends to make and its resolution plans before the Committee of Creditors (CoC) on Friday. A CoC meeting is also convened on Friday to finalise the bidding process.
On Wednesday, IIHL quoted Rs 9,650 crore for RCap, offering the entire amount in upfront cash, as other bidders stayed away from the second e-auction. The bid amount was much lower than the bankrupt firm’s liquidation value of Rs 13,000 crore.
IIHL’s total bid is Rs 1,900 crore more than its own bid of Rs 8,110 crore placed during the first challenge mechanism.
In August 2022, RGICL had sought a Rs 600-crore capital infusion from parent RCap to improve its solvency level. The capital was required to preserve the business, enhance the value and take the company’s solvency to about 175% from 155%. RGICL had sought for the capital infusion by December 31, 2022.
In February this year, RGICL reiterated its demand for a capital infusion, citing loss of business to rivals due to delay in resolution of the parent firm. RGICL was facing “borderline solvency” due to business hesitation from corporate clients, governments and key retail and bank partnerships, it had said.
RCap’s CoC had rejected the demand, stating that the firm was part of the bankruptcy proceedings.