The Torrent grouph as emerged as the highest bidder for Reliance Capital Ltd (RCL) with an offer of Rs 8,640 crore at the e-auction of Anil Ambani’s former core investment company.
The Hinduja group came in second with an offer of Rs 8,150 crore. Cosmea Piramal and Oaktree, which were also in the race, did not finally participate in the bidding. It is learnt that the lenders of Reliance Capital will hold a meeting later this week to take a final call on the winning bidder.
While they will consider all the bids, the Torrent group is likely to clinch the deal as it has bid the highest. If its wins RCL, the Ahmedabad-based Torrent group will venture into financial services by acquiring a 100 percent stake in Reliance General Insurance and a 51 per cent share holding in Reliance Nippon Life Insurance apart from other assets.
While the base amount for Reliance Capital was set at Rs 6,500 crore, the bids by Torrent and the Hindujas are below the liquidation value of RCL. Duff and Phelps and RBSA Advisors had pegged the liquidation value of Reliance Capital at Rs 12,500 crore and Rs 13,200 crore, respectively.
Reliance Capital had entered debt resolution in November 2021 after it defaulted on payments to the tune of Rs 24,000 crore. The creditors opted for e-auction after Life Insurance Corporation and the Employee Provident Fund Organisation, which had a strength of 35 per cent in the committee of creditors (CoC),voted against liquidation.
Last year, the RBI superseded the board of RCL in view of payment defaults and serious governance issues. The banking regulator appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process of the firm. The RBI had filed an application for the initiation of resolution proceedings against the company at the Mumbai bench of the NCLT.