Authum Investment and Infrastructure H1 bidder for Reliance Home Finance

June 21, 2021 5:00 AM

Apart from Authum, other bidders for Reliance Home Finance included Global Capital, Avenue Capital in partnership with ARCIL, and global fund Ares SSG along with Assets Care and Reconstruction Enterprise (ACRE).

If the lenders approve a resolution plan, Reliance Home Finance will be the second NBFC to get resolved outside court after Altico Capital.If the lenders approve a resolution plan, Reliance Home Finance will be the second NBFC to get resolved outside court after Altico Capital.

By Ankur Mishra

Mumbai-based NBFC Authum Investment and Infrastructure has emerged as the highest bidder (H1) for Reliance Home Finance. In a stock exchange filing on Sunday, Authum Investment and Infrastructure confirmed that it has received a letter of intent from lenders for acquiring the troubled home finance company. Authum’s Rs 2,887-crore bid for (RHF) may have secured more than 90% votes from lenders in a voting process that concluded on Saturday evening, the source added.

The total financial indebtedness of Reliance Home Finance stood at Rs 13,400 crore as on May 31, 2021. The list of lenders includes Bank of Baroda, Punjab National Bank, ICICI Bank, HDFC Bank, Canara Bank, Bank of India and Indian Bank, among others.

Apart from Authum, other bidders for Reliance Home Finance included Global Capital, Avenue Capital in partnership with ARCIL, and global fund Ares SSG along with Assets Care and Reconstruction Enterprise (ACRE).

Authum’s Rs 2,887 bid promised 90% (2,587 crore) upfront payment for the lenders as per sources. The balance 10% amounting to Rs 300 crore will be be paid to lenders within one year. Apart from it, around Rs 1,800 crore of cash available with Reliance Home Finance will also be distributed to lenders along with the proceeds from the resolution plan, according to sources.

The Alpana Dangi-promoted Authum Investment and Infrastructure is a Mumbai-based non-banking financial institution carrying on the business of investment in shares and securities. The company is also engaged in financing activities as per its website.

The firm has over Rs 1,500-crore networth as on December 2020. The BSE listed entity had posted a net profit of Rs 74 crore during the December quarter, compared to Rs 19 crore during the September quarter.

Lenders had earlier signed an inter-creditor agreement (ICA) to resolve Reliance Home Finance as per the June 7, 2019, circular of the Reserve Bank of India.

If the lenders approve a resolution plan, Reliance Home Finance will be the second NBFC to get resolved outside court after Altico Capital.

The net loss of RHF had earlier widened to Rs 445 crore in the March quarter (Q4FY21), compared to a Rs 248-crore loss in the same quarter in FY20.

The interest income of the lender halved to Rs 135 crore during Q3FY21, compared to Rs 271 crore during the March quarter last year. Similarly, total income during the March quarter declined 42% year-on-year (y-o-y) to Rs 162 crore.

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