InvestorQ : Why is Adani Enterprises with the co-bidders in the DHFL assets?
Chandralekha Desai made post

Why is Adani Enterprises with the co-bidders in the DHFL assets?

NISHA Nayak answered.
2 years ago

Clearly, it looks like the Adani group is unhappy with its co-bidders for the assets of DHFL, which went bust under a load of debt. Adani Enterprises has bid a total of Rs.33,000 crore for Dewan Housing Finance but other bidders like Oaktree and PEL want DHFL out for missing the deadline on the race and putting in the bid late.

Adani has apparently put in the best bid for the assets of DHFL compared to the other parties like Piramal Enterprises, Oaktree Capital Management of the US and SC Lowy. However, the committee of creditors led by SBI want the bidders to revise their bids upwards to make it more realistic in current market conditions.

Originally, Adani had only bid for DHFL's Slum Rehabilitation Authority (SRA) portfolio. However, seeing that others were putting in low bids, Adani decided to offer Rs.33,000 for the full asset book of Dewan Housing. Adani has maintained that their offer would give the best value for money to lenders.

Among the other bidders, Piramal Enterprises had quoted Rs.23,500 crore only for the retail portfolio of DHFL. On the other hand the Hong Kong-based S C Lowy had bid Rs.2350 crore for the SRA portfolio of DHFL. The rival bidders had objected to the technical reality that Adani had put the bid after the last date and wanted it declared null and void.

However, Adani in its response, has pointed out that it had originally bid only for the wholesale and SRA book and now it is bidding for the retail book also. Therefore it is more of an extension of the original bid and not a fresh bid. Adani also felt that bids put by rivals did not reflect the fair value.

However, Adani has pointed out that he has gone purely by the book. The bid document, according to Adani gives liberty to the administrator to examine the bid received at any stage of the resolution plan submission. Adani also added that during this process the rival bidders had no right to object to such submission.

As of July 2019, DHFL owes Rs.83,873 crore to banks, the NHB, mutual funds and bondholders and is a clear systemic risk. The sooner it is resolved, the better it is.