Aditya Birla ARC, Arcil Among Investors For IDBI Bad Loans
A dozen investors, including Avenue Capital-backed Aditya Birla ARC, Asset Reconstruction Company India (Arcil), Omkara ARC, Invent ARC, ASREC, UV ARC, Phoenix ARC, Alchemist ARC, and Prudent ARC, have expressed their interest in acquiring IDBI Bank's bad loans worth Rs 8,842 crore.
These stressed assets are spread across 12 accounts, including Jaiprakash Associates, VOVL, and Wind World India.
Interested investors submitted EoIs until 28 November, and around eight of them have submitted their interests, said two sources familiar with the matter.
Now, a firm bid will be called by the lender for the bad loan pool. During this month, IDBI Bank has initiated the process to sell a dozen accounts’ portfolio, with the oil and exploration arm of Videocon Industries, VOVL, leading the pool at Rs 4,584 crore, followed by Jaiprakash Associates (Rs 1,836 crore), Wind World India (Rs 748 crore), followed by Metalyst Forgings (Rs 446 crore). Other accounts include McNally Bharat Engineering, Metenere, Pink City Expressway, GTL, MBL Infrastructures, The Jeypore Sugar Company, and Aravali Infrapower.
According to a source, Expression of interests (EoI) may not always necessarily result in firm bids, but the bank would be able to sell some of these loans.
Some of these loans were to be resolved in the court of law but have been delayed. Also, some of these non-performing loans (NPLs) like Jaypee Associates, GTL, VOVL were in the list to be sold to the National Asset Reconstruction Company (NARCL). However, this sale could not be finalised, and now these lenders are looking to sell loans to private ARCs and other interested investors.
Separately, IDBI Bank has also mandated Ernst & Young (EY) as a process advisor to sell Rs 4,000 crore loans of the separate division namely stressed asset stabilisation fund (SASF). This fund was set up as a special purpose vehicle (SPV) and had a tenor of 20 years.
The lender has been reducing its non-performing ratios with GNPA standing at 4.9 per cent and NNPA standing at 0.39 per cent at the end of September 2023, down from 5.05 per cent and 0.44 per cent in the previous quarter.
