Reliance Capital, promoted by Anil Dhirubhai Ambani Group, saw its share hit an upper circuit of 5 percent yet again on Monday at Rs 11.15. The shares have been consecutively rising by 5 percent for the past six trading days and have gained approximately 28 percent.
The stock gains as the war between two prospective buyers of the debt-ridden company, Torrent Investments, and Hinduja Global continues to make higher bids for the company. Last week, Torrent Investments won that auction with an Rs 8,640 crore bid which it offered to pay on a deferred mode.
On the same day, the Hinduja Group revised its offer from Rs 8,110 crore to Rs 9,400 crore with a majority of the payment in the form of upfront cash. Following this, the Torrent Group moved the Mumbai bench of NCLT, which stayed the resolution process. In addition to this, the company has decided to pay the entire Rs 8,640 Crore in the form of upfront cash now.
The new auction will be conducted on a higher base price of Rs 8,000 crore, compared with Rs 6,000 crore earlier. Bidders will need to bid over this base price to remain in the race, the people with the knowledge of the matter said.
The liquidation value of Reliance Capital is pegged at around Rs 13,000 crore and the fair value is Rs 17,000 crore. The new Challenge Mechanism round is likely to be held around January 20th, 2023, and the current deadline to complete the resolution process of Reliance Capital is January 31st, 2023.
Reliance capital limited, an Indian diversified financial service, was placed under insolvency proceedings in December 2021 after the Reserve Bank of India suspended the board of the company and appointed an administrator to help with the proceedings and settle claims worth over Rs 25,000 Crore.
It became the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the IBC. The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).
On a consolidated basis, the company posted a total revenue of Rs 5,795.81 Crore which declined marginally from Rs 5,993 Crore in the same period the year earlier. Their net profit in the period was Rs 215.82 Crore compared to a net loss of Rs 1,021 Crore in Q2FY22.
Written by Anoushka Roy
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