Hinduja Group Core Investments made the second largest offer of Rs 8,110 crore for the company, which has 20 financial services entities from insurance to broking, the people said.
Hinduja, Torrent Investments and Oaktree Capital Participated in the auction held on Wednesday to sell Reliance Capital, which is going through the corporate insolvency process.
Hinduja was the highest bidder in the first round of the auction, while Torrent Investments was the highest bidder in the second and third rounds on Wednesday, said one of the people cited above.
The same person said Oaktree Capital pulled out of the race after offering `6,800 crore. Offers submitted during Wednesday’s auction were based on net present value (NPV), which discounts future payments at a common discount factor.
Torrent’s offer would equate to a realization of 34 paise on Re 1 on an NPV basis.
Y Nageswara Rao, administrator at Torrent Investments, Oaktree and Reliance Capital, did not respond to ET’s request for comments. The Hinduja Group could not be reached for comment. In Wednesday’s auction, Torrent raised its bid from the November 28 offer to Rs 8,640 crore.
It then offered a staggered payment of Rs 5,520 crore, which worked out to an NPV of Rs 4,206 crore.
All the three bidders will have to submit a detailed resolution plan by Thursday evening. The resolution plan will detail the upfront and severance payments to lenders and other creditors, and outline the source of financing the acquisition. Also Rs 200 crore lying in the company will be distributed among the cash and cash equivalent creditors.
Piramal Enterprises-Cosmia Financial Holding The team, which had placed the highest binding bid of Rs 5,231 crore on November 28, did not participate in the auction. Cosmea crashed out of the race on Tuesday, making it difficult for her partner Piramal to participate in the auction process, ET reported on Wednesday.
better value
The auction has also helped lenders reduce the wide gap between the liquidation price and the bids.
In the first round, which ended in late November, lenders received bids 60-70% below the liquidation price, prompting them to hold auctions to get better offers.
The administrator has accepted Rs 25,335 crore in claims from financial creditors. Lenders had fixed a starting bid amount (TBA) of Rs 6,500 crore for the first round of auction. This was increased by Rs 1,000 crore in the second and third rounds. In this, Rs 500 crore and Rs 250 crore were to be improved in the fourth and fifth rounds respectively. Effectively, TBA 7,500 crore for the second round and Rs 8,500 crore for the third, Rs 9,000 crore for the fourth and Rs 9,250 crore for the fifth round.
Prospective buyers can also offer multiples of Rs 10 crore after submitting a limit bid.
