The Hinduja Group has emerged as the lone bidder for the entire assets of debt-laden Reliance Capital (RCap), quoting Rs 9,650 crore as upfront cash for the former Anil Ambani firm. Two other prospective applicants – Torrent Group and Oaktree Capital – did not take part alleging lack of clarity and assurances of “finality” in the extended challenge mechanism, sources close to the development said. Hinduja Group, which placed its bids through a group firm IndusInd International Holdings (IIHL), has assured there will be no deferred payment.

The bid price of Rs 9,650 crore would give the lenders a total of Rs 10,100 crore, as RCap already has Rs 500 crore in cash on its books, sources said. The recovery for secured lenders will be about 70%. The total secured debt of RCap is at about Rs 16,400 crore. However, the bid price falls below the liquidation value of Rs 13,000 crore as assessed by two independent valuers – RBSA and Duff & Phelps.

Also Read: Prospective bidders of Reliance Capital seek clarity, assurances of finality

Gujarat-based Torrent Group’s Torrent Investments, Singapore’s Oaktree Capital and consortium of Piramal Group and Cosmea Financial, did not participate in this round, even though they were eligible to take part in the process due to the Earnest Money Deposit they had made. They did not participate citing the committee of creditors’ (CoC’s) inability to assure a “finality” of the insolvency process through the second e-auction, as the lenders wanted to conduct further negotiations for value maximisation. The finality clause also was opposed by RCap’s largest lenders – Life Insurance Corporation of India (LIC) and Employees’ Provident Fund Organisation (EPFO) – who have a combined voting rights of 30% in the CoC and admitted claims of Rs 8,200 crore.

The bidders had also sought a “transparency” in the extended challenge mechanism such as information on the number of bidders participating in the round and value of their bids. Further, the e-auction should be held even if there was only one bidder in the race, a “zero date” payment policy starting from the date of non-objection certificates and for changes in the terms of ‘force majeure’ were among other demands.

Also Read: Lenders of Reliance Capital to meet on Monday to consider bidders’ concerns

The CoC’s last week meeting was adjourned with the lenders being “undecided” on most of the requests, but certain demands such as ‘no toppling bids’ (accepting bids outside the e-auction) were accepted. In the first e-auction held on December 21, 2022, Torrent had emerged as the highest bidder with a bid of Rs 8,640 crore and Hinduja followed with a quote of Rs 8,110 crore. However, after the conclusion of the auction, IIHL had submitted a revised bid of Rs 9,000 crore.

Post receipt of IIHL’s bid, the CoC had decided to conduct the second e-auction. On its part, Torrent had contested the toppling bid and the legality of the second e-auction and the matter is currently pending before the Supreme Court. The apex court had permitted the CoC to conduct the extended challenge mechanism, which is subject to its final judgment in the matter. The next date of hearing in the matter is scheduled for August. A final decision on the resolution of RCap will be subject to the outcome of the apex court’s judgment in the appeal filed by Torrent.