Lenders to Anil Ambani-promoted Reliance Capital Limited (NSEI:RELCAPITAL) decided they will not accept any topping offer outside the proposed auction process and negotiate only with the highest bidder, multiple people aware of the development told ET. The committee of creditors (CoC) April 20, 2023 discussed various concerns from potential bidders regarding the auction of the distressed financial services company that is undergoing a corporate insolvency process. Torrent Investments Private Limited, a Hinduja group entity and Oaktree Capital have indicated to the administrator Nageswara Rao Y that they will likely participate in the proposed auction scheduled on April 26.

The decision of lenders to negotiate only with the highest bidder will send out a message to potential buyers to put in aggressive bids at the auction if they are serious about acquiring Reliance Capital, said the people cited above. The potential bidders had sought assurance from lenders that they would not hold a third round of auctions if the highest offer were to trail the liquidation value. Lenders led by Life Insurance Corporation of India were uncomfortable giving such a commitment, said the people cited above.

In fact, lenders are holding a second round of auctions primarily because the offers in the first round were below the liquidation value of INR 125,000 million to INR 130,000 million. For the proposed auction, lenders have decided to retain INR 95,000 million as the threshold price, including INR 80,000 million as upfront cash.