DHFL Receives Interest From 24 Bidders

Lenders to Dewan Housing Finance Corporation Ltd. have received expressions of interest from 24 bidders under the insolvency process, two people in the know told BloombergQuint on condition of anonymity. The deadline for submitting EoIs ended at midnight on Monday.

Those interested range from private equity firms to stressed asset investors and domestic non-bank lenders. While some have expressed an interest in DHFL’s entire loan portfolio, others have preferred to bid for the safer retail portfolio.

Bain Capital, Welspun Group, KKR & Co., Asset Reconstruction Company of India Ltd. or Arcil and Oaktree Capital are among those who have submitted bids for the entire DHFL portfolio, the people quoted above said.

Those who have submitted bids for a part of the portfolio include Deutsche Bank, Baring Capital, Edelweiss Group and the Piramal Group, the people added.

BloombergQuint couldn’t ascertain the full list of bidders.

KKR and Oaktree Capital declined to comment on the story. Bain Capital, Welspun Group, Arcil, Baring Capital, Deutsche Bank, Edelweiss Group, Piramal Group and State Bank of India did not reply to queries mailed on Monday evening. R Subramaniakumar, the Reserve Bank of India appointed administrator for DHFL did not respond to calls or messages.

First NBFC Test Case Under IBC

DHFL is the first test case of resolution of a non-bank lender under the Insolvency and Bankruptcy Code. It was referred for insolvency by the RBI under a special window of the IBC on Nov. 20, 2019.

Financial and operational creditors had submitted claims worth Rs 87,000 crore as part of the insolvency process. SBI is the largest financial creditor in the consortium which also includes bond holders. More than 55,000 fixed deposit holders also have claims worth more than Rs 4,500 crore against DHFL.

On Jan. 28, the lenders had called for EoIs from interested bidders for DHFL's loans. The bidders were allowed to either bid for all assets or a portion of the loan book, as per their investment appetite.

As per the terms set by the financial creditors, the company will be split into three parts—retail, wholesale and slum rehabilitation projects. The decision to allow bidders to submit resolution plans even for parts of DHFL’s business is expected to help draw in a wider set of potential bidders.

Still A Long Process Ahead

To be sure, submitting an EoI is only the first step in the process. The potential bidders will now get access to DHFL’s financials for due diligence, after which they will submit final bids. The bidders have the option to not participate in the process after conducting due diligence. Lenders are expecting to draw up a final list of bidders by March 2.

DHFL has a loan book of over Rs 80,000 crore and has been facing liquidity stress since October 2018. The collapse of Infrastructure Leasing & Financial Services Group and the consequent liquidity crunch worsened conditions for the housing financier which was already weighed down by governance concerns.

This story has been updated to reflect the final number of EoIs as of midnight on Monday.