Adani, Poonawala and Piramal express interest in RBI-initiated sale of debt-laden Reliance Capital

Anil Ambani, promoter of Reliance Capital

No less than 14 major majors in the banking and financial sector, including Adani Finserve, KKRPiramal Finance and Finance Poonawala expressed interest in acquiring debt-ridden Adani Capital, led by controversial industrialist Anil Ambani.

the Reserve Bank of India (RBI)-appointed administrator has extended the deadline for submitting bids to March 25 from March 11 to acquire the Non-Banking Financial Company (NBFC), PTI reported. The deadline has been extended because some of the bidders requested more time to complete the Expression of Interest (EOI) submission process.

Other top bidders that submitted EOIs include ArpWood, Varde Partners, Multiples Fund, Nippon Life, JC Flowers, Brookfield, Oaktree, Apollo Global, Blackstone and Hero Fincorp.

It should be recalled that the central bank replaced the board of directors of Reliance Anil Dhirubhai Ambani Group on November 29 due to payment defaults and governance problems. Since November 2021, Capital Dependency defaulted on loans worth Rs 8,3138.8 crore. Two other major NBFCs that will be replaced by RBI during the year were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL) under the Insolvency and Bankruptcy Code (IBC).

According to the PTI report, the majority of interested players who submitted bids did so to acquire the entire company. Candidates can either bid for the whole company or for one or more of the eight subsidiaries of the company led by Ambani. The principal subsidiaries of Reliance Capital are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance and Reliance Commercial Finance. Reliance Capital’s total debt in the December quarter stood at Rs 27,100 crore while net worth was reported negative at Rs 8,195 crore on a consolidated basis or Rs 13,700 crore negative.

The RBI had appointed Nageswar Rao Y, former Executive Director of Bank of Maharashtra, Trustee of Reliance Capital to oversee the NBFC’s Corporate Insolvency Resolution Process (CIRP). The banking sector regulator then launched tenders for the sale of the company in early February.

Reliance Capital was established on March 5, 1986 and is registered as NBFC Core Investment Company (CIC) – Non-Deposit Taking Systemically Important (NBFC-CIC-ND-SI) under the Reserve Bank of India Act, 1934.

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John A. Bogar