Five bidders have expressed interest in taking over the debt-laden Sumeet Industries Limited (BSE:514211). These bidders are UP-based Bhola Ram Papers & Power Private Limited, Bhilosa Industries Pvt. Ltd. and Bhumi Tex Industries of Mumbai, Gujarat's Eagle Group and Silvassa-based Geelon Industries Private Limited, said people in the know.

Two large companies - Reliance Industries and Kolkata-based Chatterjee Group company MCPI - have not submitted bids after earlier expressing interest in buying Sumeet Industries. "Lenders received final bids on June 20 and will meet later this week to evaluate them. Expectations are that recovery could be about INR 2,500 million or around 40% of the total debt, " said a person familiar with the bids.

Sumeet Industries owes lenders and operational creditors led by Bank of Baroda (BoB) a total of INR 6,670 million. The company was admitted for bankruptcy proceedings in December last year, after a failed attempt to restructure its loans. "Received resolution plans from prospective resolution applicants and due to some confidential and price sensitive information, currently we cannot disclose the name of the resolution applicants who have submitted the bids," said Satyendra Khorania, the resolution professional for the company.

All the proposals will be placed before the committee of creditors "and after that, the details will be provided at public domain if found suitable", he said in an emailed response to ET's questions. BoB is the largest creditor to the company with a 65% share of the company's dues to financial creditors, followed by IDBI Bank (21%). Other lenders are Central Bank of India, Canara Bank, Union Bank of India and Germany-based Oldenburgische Landesbank AG.

With Reliance and MCPI choosing not to bid, lenders are hoping that the bidders in the fray will compete aggressively, resulting in better value for them. "One way to look at it is that no bidder will now be reluctant to participate. Previously it has been seen that whenever a large company like RIL is in the fray, others are reluctant to put in aggressive bids.

Banks will now have to evaluate the bids to ensure they are financially and legally compliant to weed out any ineligible bidders," said a second person aware of the process.