NCLT approves Hinduja Group’s Rs9,861-cr offer for Reliance Capital

The National Company Law Tribunal (NCLT) has approved a Rs9,861-crore offer by Hinduja Group company IndusInd International Holdings Limited (IIHL) to take over the assets of bankrupt financial services company Reliance Capital. 

IIHL emerged as the highest bidder for debt-ridden Reliance Capital in the second round of auction concluded in April 2023. 

The offer includes Rs9,661 crore for creditors and an additional Rs200 crore in reimbursements. Lenders would also get a cash balance of over Rs500 crore in the credit of Reliance Capital.

The approval from the Mumbai Bench of NCLT, through a verbal order, comes amidst threat posed by another bidder, Torrent, challenging IIHL's resolution plan in the Supreme Court.

Torrent had offered Rs8,640 crore for RCap debt resolution, even as IIHL revised its bid to Rs9,000 crore.

The Committee of Creditors (CoC) made the final selection in a challenge round as all four offers were found to be unacceptable. The selection process was completed on 21 December 2022 with only Torrent and IIHL participating.

Torrent Investments Pvt Ltd moved the Supreme Court challenging the National Company Law Appellate Tribunal’s order allowing Reliance Capital’s lenders to initiate the second auction.

And, in June 2023, the lenders group voted in favour of the final resolution plan submitted by IIHL, as it had the highest cash component of Rs9,661 crore. 

Under the IIHL resolution plan, lenders would receive about Rs10,200 crore against Rs16,000-crore of outstanding secured debt - a 65 per cent recovery.

Reliance Capital is currently being managed by an RBI-appointed administrator Nageswara Rao Y under the Corporate Insolvency Resolution Process (CIRP).

Reliance Capital has 7,57,370 shareholders, as of the quarter ended 31 December 2023, and a consolidated debt of about Rs40,000 crore.