Reliance Capital base price for e-auction raised to Rs 6,500 crore

NEW DELHI: The insolvency resolution process of Reliance Capital has taken another twist as the lenders now increasing the base price for the e-auction from Rs 5,231 crore to Rs 6,500 crore. Sources close to the development told this newspaper that the move by the lenders has left the bidders in shock and put a question mark on the success of the e-auction process.

The auction will now take place on December 22 and December 23, instead of an earlier proposal of holding it on December 19. As per the earlier proposal, the bid value of Rs 5,231 crore quoted by the Cosmea and Piramal consortium was to be the base value or starting price for the proposed e-auction. However, the committee of creditors (CoC) in a meeting on Tuesday raised the base price to Rs 6,500 crore.

Bidders left in the race for Reliance Capital now consider the new base price as unrealistic. As per the rules laid down for the e-auction, the bidders will have to raise the bid value by a minimum of Rs 1,000 crore each in the first and the second round.  This means the first bid has to be a minimum of Rs 7,500 crore and the second Rs 8,500 crore. Subsequently, in the third and fourth rounds, the bid amount has to go up by Rs 500 crore and Rs 250 crore, respectively.

Reliance Capital has received four binding bids on November 28, which was the last date for submitting bids. The highest bid of Rs 5,231 crore has been submitted by a consortium of Cosmea Financial and Piramal. Hindujas with Rs 5,060 crore has emerged as the second-highest bidder, followed by Torrent Group (Rs 4,500 crore) and Oaktree (Rs 4,200 crore).