The matter of buying Anil Ambani’s company Reliance Capital did not work, NCLT took this big step

Reliance Capital E-Auction: The decision has not yet been made on whose share the debt-ridden Anil Ambani’s company Reliance Capital will get. The National Company Law Tribunal (NCLT) on Tuesday stayed the resolution process of debt-ridden Reliance Capital Limited on the petition of Torrent Group. On January 3, 2023, the Committee of Creditors of Reliance Capital Limited met under the Insolvency Resolution Process, in which the bids of both Torrent Group and Hinduja Group have been discussed. Sources said that Gujarat’s Torrent Group has challenged the revised bid made by Hinduja Group in this petition. While hearing the petition, NCLT Mumbai stayed the liquidation process.

Why the decision could not be taken on winning the bid of Reliance Capital

Torrent Group emerged as the highest bidder in the e-auction for Reliance Capital with an offer of Rs 8,640 crore while Hinduja Group’s bid stood at Rs 8,110 crore. However, on the next day of the e-auction, the Hinduja Group revised its offer to Rs 9,000 crore. In fact, after the end of the e-auction, the Hinduja Group, while improving the old bid, again introduced the resolution process and increased the bid amount to Rs 9,000 crore. Apart from this, the company also presented an offer to give 100 percent cash. On the other hand, Torrent Group has offered only Rs 3,750 crore as upfront cash, which is 54% of Hinduja Group’s offer.

Why did the torrent group object

After this, Torrent Group claimed in its petition that it was wrong and illegal to make a revised offer on behalf of Hinduja Group after the e-auction. The National Company Law Tribunal (NCLT) has asked the administration to respond to the petition of the Torrent Group. The next hearing of the case will be next week.

Why is this e-auction happening for Reliance Capital

This e-auction has been done on the initiative of LIC and EPFO, the big lenders of Reliance Capital. The combined stake of these two in COC is 35 per cent. This is the first time that an e-auction was conducted for an NBFC (Non Banking Financial Company) under the Insolvency and Banking Code (IBC). The Committee of Creditors (CoC) of Reliance Capital Limited had fixed the floor price of Rs 6500 crore in the auction held on 21 December. The National Company Law Tribunal (NCLT) has set a deadline of 31 March 2023 to complete the resolution process of Reliance Capital.

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