The e-auction will commence from December 19 and will be an ascending auction process.
The bid price of Rs 5,300 crore quoted by the Cosmea-Piramal consortium will be the base price for the planned auction, and bidders in the first round will have to bid Rs 1,000 crore more than this base price of Rs 5,300 crore.
In the second round, the bid value must increase by a minimum of Rs 750 crore, while in the third and fourth rounds the bidder will have to increase the minimum bid value by Rs 500 crore and Rs 250 crore, respectively. It is likely to be a two-day auction process.
This is the first time that an e-auction of this scale and magnitude will take place for resolution under IBC.
Decision has been taken in favor of ascending e-auction at the behest of LIC and EPFO, which controls 35 per cent of the voting rights in the CoC. Both the lenders have voted against the liquidation and descending e-auction proposals.
CoC did not take any decision on this Reliance General Insurance‘s Demand 600 crore for a capital investment of Rs. Reliance Capital.
Reliance Capital had received 4 binding bids at the company level. The highest bid of Rs 5,231 crore was submitted by a consortium of Cosmea Financial and Piramal.
HindujaWith a bid value of Rs 5,060 crore, RCAP was the second highest bidder. The other two bidders, Torrent and Oaktree, have bid sizes of Rs 4,500 crore and Rs 4,200 crore, respectively.
In the Cosmea-Piramal bid, Piramal’s liability is limited to Reliance General Insurance only.
On the other hand, the valuation report by independent valuers – Duff & Phelps and RBSA pegs the liquidation value of Reliance Capital at Rs 12,500 crore and Rs 13,200 crore, respectively.
The liquidation value of Reliance Capital is about 70 per cent higher than the value of the bids received.
According to Duff & Phelps, the liquidation value of Reliance General Insurance is Rs 7,000 crore, and Reliance Nippon Life Insurance The turnover is Rs 4,000 crore.
RBSA pegs the liquidation value of Reliance General Insurance and Reliance Life Insurance at Rs 7,500 crore and Rs 4,300 crore, respectively, though no separate bids have been received for the two insurance arms of Reliance Capital.