Stage set for the second round of auction for Reliance Capital's assets

The stage is set for the second round of auction for bankrupt Reliance Capital's assets on March 20, even as the Torrent Group plans to move the Supreme Court against another auction.

Prospective bidders like the Hinduja group and Torrent will have to provide a minimum upfront cash amount of Rs. 8,000 crore to participate in the auction.

The minimum bid amount for the first round has been fixed at Rs 9,500 crore, while the second round would require a bid of Rs 10,000 crore, with an additional Rs 250 crore for the subsequent round.

The auction is being held after the National Company Law Appellate Tribunal ordered a second round to get the maximum value for the assets. In the first auction held in December, the Torrent group emerged as the highest bidder with Rs 8,640 crore. Hinduja group offered Rs 9,000 crore after the auction, which led to the lenders planning a second round of auction. Torrent had objected to the second auction and had moved the court in January.

As per the new bidding rules, each bidder will be allotted 30 minutes to bid in each round, with the round closing if all participating bidders submit bids prior to the end of the 30 minutes. The administrator, based on instructions from the CoC, will announce the closure of each round, with a 30-minute gap between each round.

The bidders will have to submit their financial proposal. Lenders clarified that all payments to creditors (excluding any equity offered to creditors) would form part of the Net Present Value (NPV) through upfront cash payment or deferred payment.

In the event that multiple financial proposals are received from any bidder during any round, the financial proposal with the higher NPV will be considered.