Billionaire Gautam Adani’s roads-to-mining group has indicated that it can improve on its ₹33,000 crore takeover offer for collapsed housing lender Dewan Housing Finance Corp. Ltd (DHFL) and has sought forfeiture of deposits of bidders seeking to vitiate auction by questioning maximum recovery of public money.
In an email written to the administrator, who is running the DHFL auction under the insolvency process, the Adani Group said it has followed due process scrupulously and its “intent has always been to provide an unconditional offer and potential value maximization for all the stakeholders and ensuring an expeditious consummation of the process”.
In the email, uploaded on DHFL data room and seen by PTI, the Adani Group said it was pained at some bidders resorting to media to sensationalize issues with an aim to prevent value maximization for the lenders and depositors. Four entities—Adani Group, Piramal Group, US-based asset management company Oaktree Capital Management and SC Lowy—submitted bids for DHFL in October but lenders, who are getting DHFL auctioned to recover unpaid loans, wanted suitors to revise their bids as original offers were low.
The Adani Group, which had initially bid only for DHFL’s wholesale and Slum Rehabilitation Authority (SRA) portfolio, in the revised offer submitted on 17 November bid for the entire book, offering ₹30,000 crore plus interest of ₹3,000 crore, an official in lenders consortia said.
This was more than ₹28,300 crore offered by Oaktree, the official said adding the firm’s conditional bid had outlined that it would hold back ₹1,000 crore on insurance claims. Piramal quoted ₹23,500 crore only for the retail portfolio of DHFL while Hong Kong-based SC Lowy bid ₹2,350 crore for SRA.
Soon after, rival bidders cried foul over Adani’s bid, saying the group had submitted the bid past the deadline and that it cannot expand on its original plan. All the three rival bidders sought disqualification of Adani, the official said.
In the 22 November email, the Adani Group said it had originally put in an expression of interest or EoI for both Option 1 and 2 (full book and part of the portfolio. It added that its October bid was only for wholesale and SRA assets as it was hopeful that along with the Piramal Group, it would complete the deal (Piramal bid only for retail assets).
But on the opening of bids on 9 November, Adani saw that bids put in by rivals did not reflect the value of the company and decided to bid for the entire book. Adani has said it “bid is as per the process” and “no resolution applicant has any right to object”. Also, the Committee of Creditors (CoC) and the Administrator are duty bound to take steps which result in value maximization.
The Adani Group said rival bidders had formed a cartel and threat by some of them to pull out of the auction was a “coercive” means to harm the bidding process.
The bid process provides for the administrator/CoC “forfeiting the earnest money of such a resolution applicant” who has “directly or indirectly engaged in coercive practice and/or restrictive practice”.
“We reiterate our intent has always been to provide an unconditional offer and potential value maximization for all the stakeholders and at the same time ensuring an expeditious consummation of the process,” Adani wrote. “We also stand committed to further improve our offer when revised offers are invited.”
A person close to the situation said it appears the Administrator was not inclined to entertain the Adani offer even though it appeared to be the highest bid.
In November last year, the Reserve Bank of India referred DHFL, the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.
