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Reliance Capital Auction: Torrent Group Highest Bidder At Rs 8,600 Crore

The Cosmea Piramal consortium had already pulled out of the bidding process.

<div class="paragraphs"><p>A shareholder speaks on a mobile phone while attending the AGM of Reliance Capital in Mumbai. (Source: Reuters)</p></div>
A shareholder speaks on a mobile phone while attending the AGM of Reliance Capital in Mumbai. (Source: Reuters)

Torrent Group on Wednesday emerged as the highest bidder for debt-ridden Reliance Capital Ltd., in the first phase of the auction conducted as part of its resolution process.

Ahmedabad-based Torrent Group submitted a bid of Rs 8,640 crore for acquiring the NBFC firm set up by the Anil Ambani Group, sources said.

Hinduja Group was the second highest bidder, they said, while Oaktree did not participate in the first phase of auction.

The Cosmea Piramal consortium had already pulled out of the bidding process.

The Committee of Creditors fixed a floor value of Rs 6,500 crore for the auction.

Sources said the increments in the auction process for the second and third rounds have been set at Rs 1,000 crore each.

As per an order of the National Company Law Tribunal, lenders have to complete the resolution process of Reliance Capital by Jan. 31, 2023.

This is the first time that an e-auction of this scale is taking place for the resolution of an NBFC under the Insolvency and Bankruptcy Code.

The decision of ascending e-auction has been taken at the behest of LIC and EPFO, which together control 35% of the voting rights in the CoC.

The Reserve Bank of India had on Nov. 29 last year superseded the board of Reliance Capital in view of payment defaults and serious governance issues.

The RBI appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process of the firm.

Reliance Capital is the third large non-banking financial company against which the central bank has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code.

The other two were Srei Group NBFC and Dewan Housing Finance Corp.

The RBI subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal.

In February this year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital.