Although there are five eligible bids that creditors are voting on, the bid for DHFL has turned out to be a two-horse race between the Piramal Group and Oaktree Capital. The two have raised a lot of heat and dust with claims and counterclaims.
According to sources, lenders are taking a decision based on the amount of upfront cash offered, the net present value of future payments, and the business plan. One of the factors going in favour of Piramal is the higher upfront cash offered compared to other plans.
In terms of the bids submitted in the last round, which concluded on December 14, Piramal had offered upfront cash of Rs 12,700 crore as against Rs 11,700 crore by Oaktree. Within days of closing the bidding process, Oaktree improved its cash offer by another Rs 1,700 crore.
However, lenders did not factor the revised offer by Oaktree while evaluating the five resolution plans that were put for vote on December 26.
Oaktree had written to lenders that it would take legal recourse if its bid were not considered. Should the vote go in favour of Piramal, it is likely that there could be further litigation.
The Piramal Group has been extremely keen on expanding its retail lending business. Both the bidders had said that they wanted to revive the home loan business and run it as a going concern with Piramal announcing that it plans to merge its existing lending business with DHFL.
Speaking to TOI, banking sources said that lenders did not want to delay the resolution further and were keen on completing the transaction soon so that the income can be booked for the current quarter.
Creditors have a debt of Rs 87,000 crore, which includes loans of Rs 38,000 crore, and the rest in debentures and deposits. The entire loan has been fully written off by banks in keeping with RBI guidelines for accounts classified as fraud. Sources said that lenders can expect to recover a third of their loan through the transaction.
Besides lenders fixed deposit holders have voting rights of around 6% in the resolution process. One of the institutional FD holders 63 Moons (formerly Financial Technologies, promoted by Jignesh Shah) has made a separate legal application for recovery of funds from fraudulent transaction and has invited other FD holders to join the company.