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Hinduja Group’s IndusInd International Holdings was the sole bidder in the extended challenge mechanism for Reliance Capital, putting up a bid of ₹9,650 crore on an upfront cash basis.
The committee of creditors (CoC) of Reliance Capital was in discussions with Torrent Investments and Oaktree Capital, besides the Hinduja Group, for the second auction, however the former two did not participate, sources told businessline. The CoC was not notified of their withdrawal till the bidding process started, they added.
The matter will now be put up for voting by the CoC in 21 days, following which it will have to be filed with the NCLT, which in total should take about a month, said sources.
Torrent had reportedly written to the CoC expressing its displeasure owing to its stand on the illegality of a second auction. It also objected to the fact that the CoC had not offered any finality in the process, which continues to be “arbitrary and vague”, sources said.
It contended that the CoC has reserved the right to further negotiate with the applicant who provides the highest NPV in the second auction, but such a right of negotiation was not given to Torrent post the first auction.
The prospective bidders had also sought that the CoC freeze the resolution plans, except financial proposals, before the extended challenge mechanism, so as to not allow revisions in submissions post the auction as an “open-ended process is only a breeding ground for more toppling bids by deviant bidders and consequent litigations leading to more delays”.
Torrent had emerged as the highest bidder post the first auction in December 2022 with a bid of ₹8,640 crore. The only other bidder then, Hinduja Group, had bid ₹8,110 crore, but it later revised it to ₹9,000 crore, following which the CoC decided to go for a second round.
Torrent had contested the decision to opt for a second auction, questioning the legality of the revised bid and provisions for a second auction.
The Supreme Court, where the case is currently being heard, 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 CoC had set the bid threshold for the second auction at ₹9,000 crore on an NPV basis, with a minimum cash upfront of ₹8,000 crore. Hinduja’s bid of ₹9,650 crore, however, is still much lower than the estimated liquidation value of ₹12,000-13,000 crore.
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