Torrent highest bidder for RCap in latest round

MUMBAI: Gujarat’s Torrent Group has emerged as the highest bidder in the challenger round for Reliance Capital under the bankruptcy process. Torrent Group and the Hindujas bid over Rs 8,000 crore each, significantly improving their earlier offers.

While the two bids are well over the revised base price of Rs 6,500 crore set by the committee of creditors, selling to the highest bidder may be a difficult decision for the lenders. This is because the CoC is understood to have set a liquidation price of around Rs 13,000 crore.

According to sources, Torrent Group has bid Rs 8,600 crore, while the Hindujas have bid over Rs 8,100 crore. Cosmea-Piramal, the highest bidder in the earlier round, chose to stay away, while Oaktree’s offer of less than Rs 7,000 crore is understood to have been the lowest. The challenger round has thrown up a surprise as both Torrent Group and the Hindujas had been restrained in their earlier bid, where they offered Rs 4,500 crore and Rs 5,060 crore, respectively.

The Torrent Group has its mainstay in the pharma business with manufacturing plants across India. The company is also in power generation, transmission and distribution, and its other businesses include cable manufacturing and gas supply.

Torrent, which was founded by Uttambhai Mehta in 1959, is led by his two sons Sudhir and Samir Mehta. The group had acquired Gujarat Lease Finance, marking its foray in the financial services segment. The Hindujas, who own IndusInd Bank, have looked at floating an insurance company.

According to creditors, the maximum value of Reliance Capital resides in its two insurance ventures, Reliance Nippon Life Insurance and Reliance General Insurance. The CoC are not keen on separately selling the subsidiaries as Nippon Life would have a say in the choice of a partner in place of Reliance Capital. The Japanese insurer has also laid a claim to Reliance Capital’s stake in Reliance General Insurance, which has been offered to the company as security.