A second round of auction for the sale of firm assets will be held by the Committee of Creditors (CoC) of Reliance Capital on March 20. Lenders have requested that bidders provide a minimum of Rs 8,000 in cash up front.

The minimum threshold or bid starting value has been set at Rs 9,500 crore in accordance with the extended challenge mechanism’s criteria. In the following round, this value will increase to Rs 10,000 crore and then by Rs 250 crore in any consecutive rounds.

In the first round, which was completed on December 21, the minimum threshold amount was maintained at Rs 6,500 crore. The National Company Law Appellate Tribunal (NCLAT), which made its judgement last week.The NCLAT’s decision provided Reliance Capital with a great deal of relief because it allowed the lenders to hold further challenge procedures so that the company could seek better bids.

“The minimum upfront monetary component for participating in round one and subsequent rounds of the Challenge Mechanism should be an amount of Rs 8,000 crore. According to a source, “Any new Financial Plan presented by the Resolution Applicant shall comply with this requirement of a minimum Rs 8,000 crore of upfront cash, regardless of the threshold bid amount of the round. The enhanced challenge procedure is expected to bring in as much as Rs 10,000 crore for the lenders.The legal wrangle is unlikely to end soon in the insolvency case of Reliance Capital as sources say that Torrent is likely to move the Supreme Court against the NCLAT decision. In the first round of the challenge mechanism, Torrent had emerged as the highest bidder with a bid amount of Rs 8,640 crore, while Hinduja Group firm IndusInd International Holdings Ltd (IIHL) was the second highest with Rs 8,110 crore bid.

The first round of the auction ran into a legal tangle after IndusInd International Holdings made an all-cash bid of Rs 9,000 crore to the lenders after the completion of the auction process. Torrent challenged the IndusInd International Holdings’ bid in the NCLT, though the company itself revised its own bid of Rs 8,640 crore by offering the entire amount in cash upfront as against Rs 3,750 crore offered in the auction.