Piramal Capital ahead of Oaktree in race to buy DHFL

In a boost to Piramal Capital and Housing Finance Ltd’s bid for Dewan Housing and Finance Corporation Ltd (DHFL), the financial services company’s administrator has scored its bid 9 points higher than that of Oaktree Capital, based on various evaluation parameters

Final decision

Although the final decision will depend on the ongoing voting by the Committee of Creditors, sources close to the development said Piramal’s overall score, based on these parameters, is understood to be 94, while Oaktree’s bid has scored 85 points.

In terms of the quantitative parameters, Piramal has a score of 79 points, while Oaktree has a score of 70 points.

Piramal is understood to be ahead in at least two of the parameters, including upfront cash recovery to creditors and fresh capital infusion. Oaktree has a marginally higher score in the criteria of net present value of cash recovery to creditors, which has the highest weightage in the scoring.

Both Oaktree and Piramal have submitted bids for DHFL, which are slightly higher than ₹38,000 crore, and both contend that their resolution plans offer the highest recovery to the CoC.

The final decision will now depend on the creditors who are voting on all four of the resolution plans for DHFL, including those by Oaktree and Piramal, as well as by Adani and SC Lowy.

Adani Group’s bid is understood to have a total score of 79 and a quantitative score of 64. “The evaluation scores are just a guiding factor, but the lenders can vote for any of the resolution plans they deem fit,” noted the source.

Voting on the DHFL resolution plans have already started, and it is expected that the winning bid will be decided January 14. A new owner for DHFL is likely to be announced towards the end of this month.

But while lenders are expecting the proceeds of DHFL resolution to boost their fourth quarter results due to the upfront cash recovery, the resolution could be in for possible litigation. DHFL is the first finance company referred to the NCLT for insolvency proceedings. The resolution has already been delayed due to multiple issues.