Ahmedabad-based Torrent Group offered Rs. 8,640 to Anil Ambani-owned Reliance Capital in an auction held on Wednesday. According to the sources, Torrent Group won the bid after beating an offer of Rs. 8,150 made by Hinduja Group, which also participated in the auction. This time Torrent offered more offers than its initial offer made last month.
Hinduja Group made the second-highest offer for the core investment company that houses 20 financial services entities. It is said that this acquisition would help the Torrent company foray into financial services as it will acquire a 100% stake in Reliance General Insurance and get a 51% stake in Reliance Nippon Life Insurance, among other assets.
The offer made by Torrent Group is below the liquidation value of Reliance Capital but is more than Cosmea-Piramal’s binding offer of Rs 5,231 crore. The lender will now prepare to hand over the company to Torrent and evaluate the bids on the basis of an upfront cash offer and net present value.
This was an e-auction and was taken on the behest of the Life Insurance Corporation and the Employee Provident Fund (EPFO) which control 35 per cent of the voting in the committee of the creditors. Both lenders voted against the liquidation.
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Creditors of Reliance Capital had offered two options for the bidding: first, the companies had to bid as a whole, including subsidiaries; second, bidders could separately go for individual businesses of Reliance Capital.
Torrent Group is led by Samir Mehta, which values around 21000 crores. Under this leadership, the firm took several strategic initiatives. Torrent is also making an investment of Rs 10,000 crore and rolling out its 16 networks across India.
