MUMBAI: Hinduja Group firm IIHL (IndusInd International Holdings Ltd) emerged as the highest bidder for the bankrupt Reliance Capital (RCap) on the second round of auction, held on Wednesday, with an offer of Rs 9,650 crore.
With this upfront cash offer, Hinduja Group, which has a stake in private sector lender IndusInd Bank, has moved a step closer to acquiring the Anil Ambani-led debt-ridden company going under the insolvency process.
The other two suitors, Torrent Investments and Oaktree did not participate in the auction, leaving IIHL as the sole bidder for RCap. Hinduja Group firm’s bid is around Rs 1,000 crore higher than the previous auction held in December last year in which Torrent Investments had emerged as the highest bidder with Rs 8,640 crore offer for Reliance Capital.
The Committee of Creditors (CoC) will now hold a meeting this week in which creditors will vote on the proposal and will discuss the future course of action. The proposal will be submitted to National Company Law Tribunal (NCLT) for approval.
“There may be some more discussions in coming days between lenders and IIHL to nudge the highest bidder to further increase its offer,” a bank official told this newspaper. “Lenders are not happy with the outcome of the auction as other bidders did not participate in the auction. We were expecting multiple rounds of bidding but absence of other bidders dashed our hopes,” he said.
Torrent Investments and Oaktree wanted a guarantee from the lenders that this auction would be final and there would be no more auctions. “It was agreed by the lenders that no bids will be accepted after the auction is over, but there was no agreement on the second point that this would be the last auction,” he said. The CoC had set a minimum bid amount of Rs 9,500 crore for the first round and Rs 10,000 crore for the second round, with an additional Rs 250 crore for subsequent rounds.
Now the stakeholders will have to wait for the decision of the Supreme Court, where the case is currently being heard. The second round of auction was held on Wednesday after the Supreme Court allowed the lenders to go ahead with second round of auction. The top court had last month permitted the CoC to conduct the second auction, subject to its final judgment. The matter will next be heard in August this year, after the CoC submits the results of the auction.
The resolution process of Reliance Capital was mired into litigation after the first round of auction. Following the closure of first round, the Hinduja Group firm submitted the bid post auction date. IIHL offered an all-cash revised bid of Rs 9,000 crore after the completion of the auction as against an offer of Rs 8,110 crore in December. This was done even though lenders had expressed their intent to hold second round of auction.
IIHL sole bidder for RCap
The other two suitors, Torrent Investments and Oaktree did not participate in the auction, leaving IIHL as the sole bidder for RCap. Hinduja Group firm’s bid is around Rs 1,000 crore higher than the previous auction held in December last year in which Torrent Investments had emerged as the highest bidder with Rs 8,640 crore offer for Reliance Capital