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Hinduja Emerges as Sole Bidder for Reliance Capital with INR 9,650 Crore Offer

Hinduja Emerges as Sole Bidder for Reliance Capital with INR 9,650 Crore Offer

Written by Sanjay Kumar

Reliance Capital

Financial services company

  • CEO: Jai Anmol Ambani (23 Aug 2016)
  • Subsidiaries: Reliance Nippon Life Insurance, MORE
  • Parent organization: Reliance Group
  • Headquarters: Santacruz, Mumbai
  • Founder: Dhirubhai Ambani
  • Founded: 5 March 1986
  • Revenue: 19,303 crores INR (US$2.4 billion, 2022)

Reliance Capital is a financial services company that has been struggling with debt and financial issues. To address these problems, the company held an auction to sell its assets. The second round of the auction took place on Wednesday (April 26), and the Hinduja Group’s IIHL emerged as the sole participant, offering INR 9,650 crore as an upfront payment.

However, it is important to note that other potential bidders such as Torrent Investment, Oaktree, and Piramal Cosmea consortium did not participate in the auction round. As a result, Hinduja was declared the highest bidder.

The lenders, who are owed money by Reliance Capital, will hold meetings this week to discuss the proposals and negotiate further before submitting them to the National Company Law Tribunal (NCLT).

The auction was rescheduled from April 11 to April 26, and the base bid was set at INR 9,500 crore on a net present value basis, with a minimum cash payment of INR 8,000 crore. The bid amount would increase by INR 500 crore after the first round and by INR 250 crore in subsequent rounds, as per the auction process.

The sale of assets is expected to help Reliance Capital reduce its debt burden and stabilize its finances. Anil Ambani, who founded Reliance Capital, has been working to address the company’s financial problems and return it to a stable footing.

Reliance Capital has faced significant financial difficulties, and on November 29, 2021, the Reserve Bank of India (RBI) took control of the company’s board due to payment defaults and governance issues. The RBI appointed Nageswara Rao Y as the administrator for the Corporate Insolvency Resolution Process (CIRP) of the company.

Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The other two companies were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).

In February of the previous year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital. The sale of assets is expected to help Reliance Capital address its financial issues and move forward in a more stable financial position.

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