Just a day before the auction to sell Reliance Capital's assets begins, the Cosmea Financial Holdings-Piramal Group combine has pulled out of the bidding process, citing “unreasonable” new base price of INR 65,000 million to participate in the auction. The Cosmea-Piramal combine had submitted the highest binding bid for Reliance Capital, but lenders had decided to seek better offers via an electronic auction. According to Cosmea-Piramal officials, the contours of the bidding process have been significantly altered, with the base bid going up by INR 13,000 million over and above its highest bid of INR 53,300 million, to start participating in the process.

With the exit of Cosmea-Piramal, there are only three players left in the race — Hinduja Group Limited, Torrent Investments Private Limited, and Oaktree Capital Group, LLC. Besides, bidders said, the subsequent rise in the auction process for the second and third rounds had also been set at a very steep level of INR 10,000 million each. The bidder was also unhappy with another INR 5,000 million for round four and INR 2,500 million for every subsequent round.

This would mean that the required bids would need to be at least INR 75,000 million, INR 85,000 million, INR 90,000 million, and INR 92,500 million, respectively. This, Cosmea-Piramal said, was not only unreasonably high and arbitrary but also unviable. The bidders are also of the opinion that by not declaring the highest bidder and not providing the ranking of the bidders after every round, the auction process is contrary to the e-auction conducted by the Government of India and the state governments in spectrum, solar, and wind power auctions.

A Piramal group source said their/Cosmea's earlier offer of INR 52,310 million is still valid and legally binding.