Lenders of debt-ridden Reliance Capital Limited (NSEI:RELCAPITAL) (RCap) will meet on April 28, 2023 to take a call on Hinduja Group Limited's firm's bid to acquire the financial services firm. IndusInd International Holdings Ltd. (IIHL), a Hinduja Group firm, emerged as the highest bidder with an offer of INR 96.50 billion in the second round of bidding concluded on April 26, 2023. IIHL is slated to make a presentation to the lenders on its resolution plan on April 28, 2023, sources said.

IIHL was the sole bidder in the second round of auction of Reliance Capital, as Torrent Investments Private Limited and Oaktree Capital Group, LLC decided not to participate in the auction. In addition to the INR 96.50 billion bid, the IIHL has also offered INR 3 billion capital infusion into Reliance General Insurance Company Limited, and another INR 0.5 billion for the items excluded under section 66 of the Insolvency and Bankruptcy Code, 2016 (IBC). This takes the total value of IIHL's bid to INR 100 billion and it has expressed intent to pay entire bid amount upfront.

The total value of IIHL's bid is around INR 19.00 billion more than its own bid of INR 81.10 billion in the first Challenge Mechanism held in December 2022. However, their bid was lower than Torrent Investments' bid of INR 86.40 billion in the first challenge mechanism. According to sources, any decision on the resolution of Reliance Capital by the Committee of Creditors (CoC) will be subject to the outcome of the Supreme Court's judgement in the appeal filed by Torrent Investments.

The resolution process of Reliance Capital was mired into litigation after the first round of auction. Following the closure of first round, the Hinduja Group firm submitted the bid post auction date. IIHL offered an all-cash revised bid of INR 90.00 billion after the completion of the auction as against an offer of INR 81.10 billion in December.

This was done even though lenders had expressed their intent to hold the second round of auction. This post-auction bid is being contested by Torrent Investments in the Supreme Court as it was the highest bidder in the first round of auction. Torrent challenged IIHL's revised bid and the lenders' decision to conduct second round of auction in NCLT Mumbai.

The NCLT ruled in favour of Torrent and the lenders of Reliance Capital challenged the order in NCLAT. NCLAT ruled in favour of the lenders and allowed them to go for a second round of auction to maximise their recovery from the sale of Reliance Capital. Torrent challenged the NCLAT order in the Supreme Court, which refused to stay the NCLAT order and allowed the lenders to go ahead with the second round of auction.

Meanwhile, the Mumbai-bench of National Company Law Tribunal (NCLT) has extended the deadline for completing the resolution process of RCap by three months to July 16. The Reserve Bank of India (RBI) on November 29, 2021, superseded the board of Reliance Capital 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.