With an offer of Rs 8,150 crore, the Hinduja group came in second. Cosmea Piramal and Oaktree, who were also in the running, did not end up bidding. It has been learned that Reliance Capital’s lenders will meet later this week to make a final decision on the winning bidder.
Even though they will consider all the offers, the Torrent group will likely close the deal because it made the highest offer. If it successfully wins RCL, the Ahmedabad-based Torrent group will enter the financial services industry by acquiring, in addition to other assets, a 100% stake in Reliance General Insurance and a 51% shareholding in Reliance Nippon Life Insurance.
The bids from Torrent and the Hindujas are less than Reliance Capital’s liquidation value, even though the base amount was set at Rs 6,500 crore. Duff and Phelps and RBSA Advisors estimated Reliance Capital’s liquidation value to be Rs 12,500 crore and Rs 13,200 crore, respectively.
In November 2021, Reliance Capital entered debt resolution after missing payments totaling Rs 24,000 crore. After Life Insurance Corporation and the Employee Provident Fund Organization, which made up 35% of the committee of creditors (CoC), voted against liquidation, the creditors decided to hold an electronic auction.
The board of RCL was replaced by the RBI last year due to payment defaults and significant governance issues. The banking regulator chose Nageswara Rao Y as the firm’s Corporate Insolvency Resolution Process administrator. At the Mumbai bench of the NCLT, the RBI had applied for the beginning of resolution proceedings against the company.