The committee of creditors of Reliance Capital (RelCap) will hold a second round of auction for the sale of company assets on March 20, sources said.

This follows the National Company Law Appellate Tribunal (NCLAT) last week allowing the lenders of Reliance Capital to hold an extended challenge mechanism or second round of auction for the sale of the debt-ridden financial services company.

Sources with direct knowledge of the matter said the second round auction was aimed at getting the maximum value from the sale of assets.

As per the rules of the extended challenge mechanism, the minimum threshold or the bid starting value has been pegged at Rs 9,500 crore, with the subsequent round rising to Rs 10,000 crore and by Rs 250 crore in any round that follows. This compares the minimum threshold value of Rs 6,500 crore in the first round that concluded on December 21.

The extended challenge mechanism will also have a threshold of a minimum cash upfront payment of Rs 8,000 crore for the bidders, sources said.

According to the sources, the committee of creditors (COC) is expecting to realise an upward of Rs 10,000 crore from the extended challenge mechanism.

In the first round of the challenge mechanism, Torrent emerged the highest bidder with a bid amount of Rs 8,640 crore, while Hinduja Group firm IndusInd International Holdings Ltd (IIHL) was the second highest with Rs 8,110 crore bid.

The first round of the auction ran into a legal tangle after the IIHL made an allcash bid of Rs 9,000 crore to the lenders after the completion of the auction process.

Torrent challenged the IIHL bid in the NCLT, though the company itself revised its own bid of Rs 8,640 crore by offering the entire amount in cash upfront as against Rs 3,750 crore offered in the auction.