Bain Capital-Arcil team to make highest offer for Rs 630 cr SME portfolio of Religare Finvest

Religare Finvest, a non-banking finance company, declared that it would hold a Swiss auction on December 20 to get an improved offer, according to a notice issued on the company’s website.

Bain Capital and Arcil have jointly offered Rs 193 crore in cash for the SME (small and medium enterprises) portfolio to Religare Finvest, the people cited above said.

Two other asset reconstruction companies — Kotak Mahindra bank-backed Phoenix ARC and Ares SSG Capital-backed Assets Care & Enterprises — have also submitted expressions of interest, according to one of the people.

A joint offer by Bain and Arcil has surprised many market participants since Bain did not partner with the Piramals despite a joint venture between the two, this person said.

Bain Capital and Piramal Enterprises have jointly floated a distressed asset fund, India Resurgence Fund, and an asset reconstruction company called India Resurgence ARC Pvt Ltd.

In January 2020, the India Resurgence ARC had acquired a Rs 625 crore SME portfolio from Religare Finvest at around 40-45 paise on a rupee. “It is likely that the Piramals were not keen on acquiring the SME portfolio from Religare. This would have prompted Bain to seek a new partner to bid for the asset,” the second person said.

Bain Capital declined to comment. Religare Finvest, Phoenix ARC and Acre did not respond to requests for comment.

Religare Finvest, a subsidiary of BSE-listed Religare Enterprises, is under the Reserve Bank of India’s lens since 2018. The RBI has imposed a ‘corrective action plan’ on January 18, 2020 on Religare Finvest, once owned by Malvinder Mohan Singh and his younger brother, Shivinder. The brothers were ousted following allegations of mismanagement and misappropriation of funds. Currently, there are restrictions on the company for undertaking lending business, making investments and distributing dividends.

In July, the parent company, Religare Enterprises, raised Rs 570 crore through a preferential allotment from the Burman family of Dabur group and Ares SSG Capital, according to stock exchange disclosures made by the company.