Hindujas raise bid for Reliance Capital in surprise move

When bids for Reliance Capital closed on Wednesday, the Hinduja group, led by IndusInd International Holdings, was placed second, with an offer of ₹8,110 crore. In its revised offer, the Hinduja group has offered upfront cash of ₹8,800 crore, significantly higher than the ₹4,000 crore offered by the Torrent group, the people said, requesting anonymity.

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During the e-auction held on 21 December, Ahmedabad-based Torrent Group submitted the highest total bid of ₹8,640 crore among the two bidders.

Torrent is offering to pay the lenders the remaining ₹4,640 crore at zero interest over 3, 4, and 5 years.

The auction process for Reliance Capital has been marked by several twists and turns, with two frontrunners, Oaktree and the Cosmea-Piramal consortium, withdrawing from the race at the last minute.

Hinduja’s revised bid has caught the Reliance Capital lenders by surprise as the e-auction process concluded on Wednesday.

“The Hindujas’ bid has come outside of the timeline. If the lenders agree to this, then Torrent could challenge this in the court, and this could further delay the resolution process,” said the first official on condition of anonymity.

The next meeting of lenders is scheduled for 26 December, when advisers KPMG and Deloitte will present their final analysis for lenders to vote and choose one of the two plans.

Emails to the spokespeople of Hinduja and Torrent, and calls to the administrator went unanswered.

The National Company Law Tribunal has set 31 January as the deadline for the resolution of Reliance Capital.

Reliance Capital is the third major non-banking financial company to have bankruptcy proceedings initiated against it by the Reserve Bank of India (RBI) under the Insolvency and Bankruptcy Code, or IBC, along with Srei Group and Dewan Housing Finance Corp. Ltd (DHFL). In November 2021, the Resreve Bank referred Reliance Capital for bankruptcy resolution after it defaulted on bonds worth ₹24,000 crore. Subsequently, Nageswara Rao Y. was appointed as the administrator for the corporate insolvency resolution process of the firm.

In February, the administrator had invited expressions of interest for the sale of the stressed shadow bank. Among the 55 companies that had submitted their expressions of interest in February, 14 submitted non-binding bids by August end. Finally, only four investors—Hindujas, Torrent, Cosmea-Piramal consortium and Oaktree Capital—submitted final bids in December.

Since the bids submitted were below the liquidation value, the committee of creditors held an e-auction in which bidders were asked to revise their bid prices.