Lenders to reschedule second round of auction for RCap, new date undecided

Reliance Capital's second auction on April 26

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26 Aug, 2025 12:21

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The second auction for the debt-ridden Reliance Capital (RCap) which was scheduled for April 11 is deferred, sources told Moneycontrol. “The second auction is deferred for today. The date for the auction will be decided soon,” a source said.

This is the second time that the auction for RCap has been deferred. Earlier, the auction was set to happen on April 4, but was postponed to April 11 after the bidders requested changes in the request for resolution plan (RFFP).

On April 4, the auction was postponed as bidders asked for changes in the resolution plan's terms and conditions to ensure compliance. They also said that no other bid apart from the one in the auction should be taken by the lenders.

The Supreme Court is yet to give a final order on the case. RCap has been in insolvency since November 29, 2021, when the Reserve Bank of India (RBI) superseded its board. The central bank appointed Administrator invited expressions of interest for the sale of RCap in February 2022.

In the first auction, IIHL submitted its bid post-auction and bidders are concerned that the resolution plan may thus not comply with terms of the RFPF or the Insolvency and Bankruptcy Code (IBC). This post-bid auction is being contested in the SC by Torrent Investment, as it was the highest bidder as per the auction.

The Committee of Creditors (CoC) also has to incorporate the SC order in the Challenge Mechanism, PTI’s sources added.

Meanwhile, the Administrator has also moved the National Company Law Tribunal (NCLT) for extension of deadline for completion of resolution process till May 30. The deadline has been extended multiple times in the past.

Earlier, on March 27, lenders of RCap announced to hold the second auction on April 4. The base bid amount has been set at Rs 9,500 crore, based on net present value (NPV) calculations, with a minimum cash share of Rs 8,000 crore.

As per the auction process, after the first round, the bid amount will increase by Rs 500 crore, and then by Rs 250 crore in subsequent rounds. It is hoped that this auction will enable Anil Ambani-promoted Reliance Capital to reduce its debt burden and get back on a stable financial footing.

The lenders of RCap have estimated the liquidation value of the company to be around Rs 12,500 crore.

On March 2, the National Company Law Appellate Tribunal (NCLAT) allowed a petition filed by RCap lenders seeking another round of auction for the ongoing insolvency process.

A two-member bench set aside an order passed by the NCLT and said CoC has the power to negotiate and call for a higher bid. The appellate tribunal permitted the CoC to continue with the challenge mechanism and invite bids after two weeks.

The NCLAT order came on a petition filed by Vistra ITCL (India), one of the lenders of RCap, challenging an order of NCLT which restricted further auction of the bankrupt firm.

After this, Torrent Investments was planning to challenge in the SC the NCLAT order which allowed lenders of RCap to seek another round of auction.

After the first auction, Torrent Investments was the highest bidder with a bid of Rs 8,640 crore for RCap. The CoC subsequently opted for a second auction after it received an offer from Hinduja group of Rs 9,000 crore, higher than that of Torrent Investments.

The RBI on November 29, 2021, superseded the board of RCap due to payment defaults and serious governance issues, and Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm.

RCap is the third large non-banking financial company (NBFC) against which the RBI has initiated bankruptcy proceedings under IBC, after Dewan Housing Finance Corporation (DHFL) and Srei Group NBFC.

The central bank subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the NCLT.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.