RCap assets e-auction to kick off on Dec 19; base bid at Rs 5,300 crore
The electronic auction of Reliance Capital’s assets would begin on December 19, with the Rs 5,300-crore offer made by the Cosmea-Piramal combine taken as the base price.
The bidders will have to bid Rs 1,000 crore onwards over the base value in the first round, a person close to the development said. The auction is expected to end within two days.
In the second round of the auction, the bid value sought would be Rs 750 crore onwards above the best offer in the previous round. In the third round, the bidders would have to increase the bid price by a minimum by Rs 500 crore, while in the fourth round, they will have to offer a minimum of Rs 250 crore or more, the source said.
Interestingly, the CoC did not take any decision on Reliance General Insurance’s demand for a Rs 600-crore capital infusion from Reliance Capital.
With the e-auction, the four final bidders — Piramal-Cosmea Financial Holdings, the Hinduja group, Torrent group, and Oaktree Capital — will have the option to outbid each other.
Reliance Capital had received four binding bids at the company level, with the highest bid from the Cosmea Financial and Piramal group combine. In the Cosmea-Piramal bid, the liability of the Piramal group is limited to Reliance General Insurance only.
The Hinduja group offered Rs 5,060 crore, while the Torrent group offered Rs 4,500 crore.
American financial powerhouse Oaktree offered Rs 4,200 crore for the entire company.
But the valuation reports by independent valuers – Duff & Phelps and RBSA Advisors — pegged the liquidation value of Reliance Capital at Rs 12,500 crore and Rs 13,200 crore, respectively. The liquidation value of Reliance Capital is far higher than the value of the bids received.
