The move by LIC to sell its ₹3,400 crore secured principal debt of cash-strapped Reliance Capital Ltd through a Swiss challenge process has received a muted response.

The IDBI Trusteeship is the process advisor responsible for running the Swiss Challenge process. The deadline for submitting expressions of interest was on Friday, and the deadline for bid submission ends on November 28.

LIC had earlier received a binding bid from ACRE SSG, Singapore, which offered 27 cents for each dollar, which would result in a 73 per cent haircut for LIC.

According to the sources, the Committee of Creditors (CoC) of Reliance Capital is upset by the LIC move as it could jeopardise the overall debt resolution.

“As per the IBC law, the CoC will receive the independent valuation of Duff & Phelps and RBSA on November 29 (the next day of the submission of binding bids), which will be available to all CoC members. So it’s not clear why there is a rush to finalise a deal before the submission of the binding bids and before the valuation is available,” said an industry source.

The deadline for submitting bids for the overall RCap assets ends on November 28, but few bidders have sought another month’s time.

Reliance Capital had received six non-binding bids under Option 1—that is, for Reliance Capital as a company. Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment, and B Right Real Estate had submitted bids in the range of ₹4,000 crore to ₹4,500 crore for RCap’s entire assets.

For Reliance General Insurance business, Piramal Finance is understood to have bid around ₹4,000 crore, while Zurich Insurance’s bid is estimated to be around ₹3,500 crore. The third bidder, Advent, may have bid ₹7,000 crore, according to sources.

Jindal Steel and Power and UVARC had submitted bids for Reliance Capital’s ARC business. For other assorted assets of Reliance Capital, three bidders — Choice Equity, Global Fincap, and Grand Bhawan — had submitted non-binding bids. The deadline to complete the resolution process, as approved by the NCLT, is January 31, 2023.