Two independent valuators of debt-laden Reliance Capital (RCap) have pegged the liquidation value of the firm at Rs 13,000 crore, which is more than double the value of the binding bids it received.
According to Duff & Phelps, the former Anil Ambani group company is valued at Rs 12,500 crore as a core investment company (CIC) and that by RBSA at Rs 13,200 crore. The combined value of RCap’s remaining businesses (clusters) such as securities, real estate and asset reconstruction companies is valued at about Rs 280-240 crore, sources close to the development said.
The administrator to the bankruptcy process had received three bids for the remaining small businesses in the range of about Rs 120 crore, they said, adding, these valuations were presented to the committee of creditors (CoC) on Wednesday.
Duff & Phelps has valued Reliance General Insurance Company (RGIC) at Rs 7,000 crore and Reliance Nippon Life Insurance Company (RNLIC) at Rs 4,000 crore. On the other hand, RBSA provided a liquidation value of Rs 7,500 crore and Rs 4,300 crore for RGIC and RNLIC, respectively.
The deadline to submit the binding bids had ended on November 28. A joint venture by Cosmea-Piramal had submitted a binding bid of Rs 5,231 crore, the highest for RCap as a CIC, followed by Hinduja Group at Rs 5,060 crore. Torrent Group’s bid was at Rs 4,500 crore and that by Oaktree Capital was at Rs 4,200 crore.
RCap’s CoC had earlier decided to reject all the bids as the prices quoted were way below expectations. It had also asked them to revise their bids, and in case of not receiving satisfactory quotations, it intends to initiate liquidation proceedings, sources added. While this will further delay RCap’s ongoing insolvency process, the liquidation would also mean more haircut for the lenders.
The liquidation, slated to be under a new regulation of Insolvency and Bankruptcy Code (IBC), would enable CoC to sell each individual business separately.
Earlier on Monday, RCap received bids from the Hinduja group, Oaktree Capital, UV Asset Reconstruction Company (UVARCL) and a joint bid from Piramal group and Cosmea Financial.
No separate bids were received for RGIC and RNLIC. The bidding process, which had ended on Monday, was lukewarm with just five bids placed for the entire assets of RCap.