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Debt-ridden Reliance Capital Ltd's lenders are believed to have finalised the process and rules for conducting an e-auction for the bidders.

The e-auction of Reliance Capital will begin on December 19, and it will follow ascending auction process, according to sources said news agency PTI.

The bid price of 5,300 crore quoted by the Cosmea-Piramal consortium will be the base price for the planned auction, and in the round one, the bidders will have to bid more than the base value, sources said.

This is the first time that an e-auction of this scale will take place for a resolution of an NBFC (non-banking finance company) under the Insolvency and Bankruptcy Code (IBC).

The decision in favour of ascending e-auction has been taken at the behest of LIC and EPFO, which together control 35 per cent of the voting rights in the Committee of Creditors (CoC), said news agency PTI, quoting sources.

Reliance Capital had received 4 binding bids at the company level and the other three are Oaktree, Hinduja, and Torrent Group.

The Reserve Bank of India (RBI) had on November 29 last year superseded the board of RCL in view of payment defaults and serious governance issues.

The RBI appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm.

Reliance Capital is the third large NBFC against which the central bank has initiated bankruptcy proceedings under the IBC.

The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL). The RBI subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal (NCLT).

In February this year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital. 

(with inputs from PTI)

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