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Lenders to proceed with RCap auction

1 min read Gopika Gopakumar 27 Mar 2023, 11:38 PM IST

Round 2 likely next week despite Hinduja retracting revised bid

Hinduja group revised bid to ₹9K cr, after round 1 auction

Mumbai: The lenders of Reliance Capital have decided to go ahead with the second round of auction on 4 April, in accordance with the Supreme Court decision, despite the Hinduja group retracting its revised bid, according to three people aware of the matter.

The Hinduja group submitted a revised bid of ₹9,000 crore on 21 December, a day after the first round of auction—in which rival Torrent Group had been declared the highest bidder—concluded. Torrent had bid for ₹8,640 crore, while Hinduja Group had originally offered ₹8,110 crore. Challenging this, Torrent approached the National Company Law Tribunal, which asked the lenders to keep the Hinduja Group’s post-auction offer on hold till final hearing.

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But an appeals court overturned the order . Torrent then approached the Supreme Court to seek a stay on the National Company Law Appellate Tribunal order, but the apex court ruled in favour of lenders, allowing them to hold a second round of auctions.

But in a surprise twist, the Hinduja group told lenders at an informal meeting last week that it wants to revert to the old offer of ₹8,110 crore.

A banker, one of the three people cited above, said that the existing bidders, including Torrent Investments and Hinduja Group, will have to enhance the bids submitted in the first round. However, the committee of creditors (CoC) has not set a reserve price for the auction, the banker said.

While the CoC can go ahead with the second round of the challenge mechanism, the outcome of the auction will be subject to the final decision of the Supreme Court.

“It is learnt that Hinduja Group told the lenders that it will participate in the auction. However, it is yet to provide a confirmation in writing on whether or not it stands by the ₹9,000 crore upfront offer," said the second person cited earlier.

The court will next hear the matter in August.

ABOUT THE AUTHOR

Gopika Gopakumar

Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.