The Mumbai bench of the National Company Law Tribunal (NCLT) has granted a three-month extension to complete the resolution process of Reliance Capital, with a new deadline of July 16. This extension was granted as the lenders agreed to hold a second round of auction on April 26 to maximise their recovery from the sale of Reliance Capital’s assets. The bidders who confirmed their participation in the second round of auction were IndusInd International Holdings Ltd (IIHL) of Hinduja Group, Torrent Investment, and Singapore-based Oaktree.

The second round of auction was initially scheduled for April 11 but was postponed to April 26 as the lenders needed time to address issues raised by the bidders. The bidders have requested that the resolution plans comply with the Insolvency and Bankruptcy Code (IBC) and Request for Resolution Plan (RFRP). Additionally, they want assurance from the lenders that there will be no further negotiations after the completion of the second round of auction and that the resolution process would attain finality after the culmination of the second round.

In the first round of the auction, the Hinduja Group firm submitted a bid post-auction date, which is being contested by Torrent Investment in the Supreme Court as it was the highest bidder. The Committee of Creditors (CoC) also needs to incorporate the Supreme Court order in the Challenge Mechanism. Meanwhile, the administrator has moved the NCLT for an extension of the deadline for the completion of the resolution process to May 30.

This is not the first time that the deadline for completing the resolution process of Reliance Capital has been extended. The Reserve Bank of India (RBI) superseded the board of Reliance Capital on November 29, 2021, given payment defaults and serious governance issues. The extension was granted as the lenders aim to maximise their recovery from the sale of Reliance Capital’s assets.

Overall, the extension granted by the NCLT provides the lenders with additional time to hold a second round of auction and address the issues raised by the bidders, ensuring compliance with the IBC and RFRP. It also allows the CoC to incorporate the Supreme Court order and resolve the bidding dispute between the Hinduja Group and Torrent Investment. The extension gives a sense of certainty to the bidders, as they can expect the resolution process to attain finality after the second round of auction.