Shares of Reliance Capital rose 3 percent in trading on Thursday amid a media report suggesting Hinduja Group entity IndusInd International Holdings, Reliance Capital's sole bidder in Wednesday's auction, offered Rs 9,650. crore by Reliance Capital in the second round, up from Rs 9,510 crore in the first round. According to a report by The Economic Times, since there were no counter offers and the auction process has concluded. Hinduja's offer was Rs 1,000 more than what Torrent Investments offered in the first round in December, the report suggested. The auction was part of his bankruptcy proceedings.
Following the development, the stock rose 2.82 percent to hit a high of Rs 9.10 on the BSE. The scrip has eroded 45% of its value so far this year and 97.88% in the last five years. Individuals with shares up to Rs 2 lakh account for 60.34 per cent of Reliance Capital shares. On the other hand, people who own more than Rs 2 lakh crore in shares of the company account for another 26.88 per cent stake in the company. LIC owned 2.98 percent of Reliance Capital as of March 31.
According to the ET report, Torrent Investments and Oaktree Capital, which had previously indicated they would participate in the process, did not submit any offers. A person familiar with the matter told the newspaper that Torrent participated in the mock auction and pre-auction discussions, but did not end up submitting a bid. The threshold for participation in the auction remained at Rs 9.5 billion, with Rs 8 billion as initial cash, the report suggests.
The lenders had told the contenders that they would negotiate an improved offer only with the highest bidder, which in this case was the Hinduja group. In the first auction held in December, Torrent Investments made the highest bid of Rs 8,640 crore, followed by Hinduja Group with Rs 8,110 crore. Within 24 hours, Hinduja offered a revised offer of Rs 9,000 crore, which was later challenged by Torrent before the National Company Law Tribunal (NCLT).
