Torrent Group emerges highest bidder in e-auction for Reliance Cap assets

The e-auction of Reliance Capital ended on 21 December and the Torrent Group emerged as the highest bidder with Rs 8640 crore bid. However, the Torrent Group may not yet have gone past the finishing line.

Hinduja Group, which was at a close number two, still have a chance to acquire the assets of Reliance Capital.

Both Hinduja and Torrent are neck-to-neck. The net present value (NPV) of the resolution plan will decide the winner. The Committee of creditors will meet on 22 December and consider the resolution plans of both Torrent and Hinduja.

The NPV could be the decider as the bidders would not pay all of the bidding amount upfront. So, the CoC has decided to look at the NPV of the future payments made by the bidders to arrive at the winner.

Oaktree and the consortium of Cosmea-Piramal did not participate in the e-auction.

The consortium of Cosmea Financial Holdings and Piramal Group has pulled out of the bidding process as it felt the new base price for the e-auction was too high, arbitrary and unrealistic.

The CoC last week increased the base price to Rs 6,500 crore from Rs 5231 crore for the e-auction.

Even Oaktree’s participation in the e-auction was doubted ever since the Committee of Creditors rejected its request for extension of the date for the auction.

Oaktree had also requested for the financial statement of Reliance Capital till 31 December. This request was also rejected by the CoC.

Reliance Capital had received four binding bids on 28 November, which was the last date for submitting the bids.

The consortium of Cosmea Financial and Piramal emerged at the highest bidder with Rs 5,231 crore bid.  Hinduja Group, which submitted a bid of Rs 5,060 crore, emerged as the second highest bidder, followed by Torrent Investment (Rs 4500 crore) and Oaktree (Rs 4200 crores).

However, the administrators as well as the lenders were not too happy with the bids as they were 60-70% lower than the liquidation value of Rs 13,000 crore.

So, they decided to go in for e-auction among the four bidders left in the fray for acquiring Reliance Capital’s assets.

Also Read: Cosmea-Piramal consortium pulls out from bidding process for Reliance Capital