Mumbai-based non-bank lender Authum Investment and Infrastructure has emerged as the highest bidder for debt-laden Reliance Home Finance.
Authum’s Rs 2,911 crore bid (which includes Rs 24 crore deferred interest) for the troubled mortgage lender is understood to have secured more than 90% vote from lenders in a process that concluded on Saturday evening.
Other bidders in the race were MSME-focused NBFC Capri Global Capital Ltd; Assets Care & Reconstruction Enterprise Ltd (ACRE), backed by Asian investor Ares SSG; and US-based distressed investor Avenue Capital which bid jointly with Asset Reconstruction Company (India) Ltd or Arcil.
Last year, four asset reconstruction companies (ARCs) and at least one NBFC had submitted bids to buy assets of the stressed Reliance Group arm.
The voting that started on 31 May and concluded at 5 pm on 19 June saw participation from over 91% of the lenders by value, people aware of the process told VCCircle.
Under Authum’s plan, entire proceeds will be received by the lenders within one year with over 90% set to be upfront payment.
This transaction will also reduce the mortgage lender parent Reliance Capital Ltd’s debt of around Rs 11,200 crore, which is 25% of its total debt.
Bank of Baroda was the lead lender in the resolution process which was managed by BoB Capital Markets and EY.
Set up in 1982, Authum (previously known as Pentium Investments and Infrastructures Ltd) is a Kolkata based non-bank lender majorly owned by Mumbai-based investment firm Mentor Capital.
Authum is into the business of investment in shares and securities and financing activities.
The NBFC had a net worth of over Rs 1,500 crore as on 31 December.
Reliance Home Finance
Set up in 2008, Reliance Home Finance is a wholly-owned subsidiary of Anil Ambani-controlled Reliance Capital.
In August last year, Bank of Baroda-led consortium of lenders had invited expressions of interest for the assets of Reliance Home Finance and Reliance Commercial Finance, both arms of Reliance Capital.
Reliance Home Finance has around Rs 11,000 crore loan book with approximately Rs 8,000 crore extended to Reliance Group companies owned by Anil Ambani.
The remaining loan book, of approximately Rs 3,000 crore, included home loans to retail customers, according to reports.
The housing finance company had cash on hand of about Rs 1,820 crore in the form of investment in liquid mutual fund and fixed deposits as on March-end 2021 and it made a net loss of Rs 1,520 crore for 2020-21.