Tata, Adani among 5 to exit Reliance Capital’s resolution; Piramal Enterprises among bidders left in race

Five prominent bidders for debt-laden Reliance Capital’s (RCap) assets have backed out of the race, as the bankruptcy process of the former Anil Ambani group firm inches towards a close. There are now only five active bidders, including Piramal Enterprises, actively pursuing the process.

This is in contrast to the nearly 54 expressions of interest (EoIs) the firm had received in March.

The latest to pull out of the process are private equity major Blackstone, HDFC Ergo, insurance firms of ICICI Lombard and Tata group, and Adani Group, sources close to the development said. Tata AIG General Insurance Company, a subsidiary of Tata Sons, had earlier evoked interest to buy RCap’s general insurance arm.

Apart from Piramal Enterprises, the prospective resolution applicants (PRAs) who are actively engaged with the administrator are Yes Bank and Torrent Group. Further, Zurich Insurance has shown interest for RCap’s general insurance cluster, and Cholamandalam Group for its life insurance cluster, the sources added.

According to the Request For Resolution Plan (RFRP) issued by the lenders, the bidders have two options — either to bid for the entire assets of the company or one or more of its clusters (subsidiaries). The subsidiaries are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Asset Reconstruction Company, Reliance Securities, Reliance Commercial Finance, and Reliance Home Finance.

Earlier, RCap’s lenders had decided to extend the deadline for completion of the firm’s resolution process by another two months to November 2 and to submit resolution plans to July 11. This followed a cold response from prospective bidders and even as certain bidders had sought “more time” to complete the due diligence procedures.

The decision to extend the deadlines was taken by the committee of creditors (CoC) at its meeting on June 16. This is the second extension for the completion of RCap’s resolution process, as the earlier deadline, as per the Insolvency and Bankruptcy Code (IBC), to complete the process by June 3 was stretched by 90 days to September 2.

RCap, currently undergoing insolvency proceedings, had got a total of 54 EoIs from prominent bidders, including ICICI Lombard, Tata AIG and Nippon Life Insurance, with majority of the suitors interested in acquiring the firm in its entirety.

Firms such as HDFC Ergo, Bandhan Financial Holdings, Cholamandalam Investment, Adani Finserv, Yes Bank, OakTree Capital, Blackstone, New Quest, IndusInd International, Brookfield, TPG Capital, Zurich, Ares SSG Capital, ArpWood Partners, Capri Global Holdings, Edelweiss Alternative, International Asset Reconstruction Company, JC Flower, Motilal Oswal, Square Four Housing, and UV Multiple Asset Investment had also thrown in their hat.

On November 29, 2021, the Reserve Bank of India (RBI) had superseded RCap’s board following payment defaults and governance issues and appointed an administrator for the bankruptcy process. Later in April, Credit Suisse and Axis Bank – two lenders to RCap – had dragged the debt-laden firm to the National Company Law Tribunal (NCLT), seeking recovery of debts worth Rs 760 crore. In February this year, the administrator invited EoIs for the sale of RCap’s assets.