Torrent Moves SC Against NCLAT Order On Auction Of Reliance Capital Assets

The Torrent Group, a bidder of bankrupt firm Reliance Capital (RCap), has moved the Supreme Court against the National Company Law Appellate Tribunal’s (NCLAT’s) order to hold a second round of auction for RCap assets.

The apex court is expected to start hearing the matter from next week.

The lenders’ of RCap have decided to hold the second round of e-auction, following the NCLAT order, on March 20.

Torrent was the highest bidder with a Rs 8,640-crore offer for RCap in the first auction held in December 2022. It said that inviting bids again would be against the spirit of an auction. Its rival, the Hinduja Group, has offered Rs 9,000 crore to the lenders.

Torrent had earlier moved the National Company Law Tribunal (NCLT) in January this year against the second auction. There, its plea was upheld. The lenders then appealed to the NCLAT, which ruled in their favour.

Under the new rules, a bidder is given 30 minutes to bid in each round, which will close if all participating bidders submit their bids before 30 minutes.

The administrator, based on instructions from the committee of creditors, will announce the closure of each round, with a 30-minute gap between two rounds.

The bidders will have to submit their financial proposal.

Lenders have said all payments to creditors (excluding any equity offered to them) would form part of the net present value (NPV) through upfront cash or deferred payments.

If there are multiple financial proposals from any bidder in any round, the one with the highest NPV will be considered.

Reliance Capital was sent for debt resolution in November 2021 after the company defaulted on loans worth Rs 24,000 crore.