Arcil aims to raise Rs 2,000 cr for boosting business plans

In a bid to support its business operations, the country's first asset reconstruction firm Arcil is in the process of raising around Rs 2,000 crore through a fund from domestic and foreign investors.

Of the total corpus, the company has already mopped up Rs 400 crore from six to seven investors at its first close, Arcil managing director and CEO S Khasnobis told reporters today.

"This is a multi-close fund and a host of investors are involved. At the first close, we raised Rs 400 crore," Khasnobis said on the sidelines of a seminar here.

Arcil, which had also raised Rs 300 crore through another fund recently, would use the capital to enhance its business operations, Khasnobis said.
    
In the last financial year, Arcil had bought bad assets from banks and other financial institutions for around Rs 600-700 crore through cash and security receipts, he said.
    
Khasnobis observed that the non-performing assets of banks are unlikely to rise steeply this year owing to improving economic conditions, but there could be issues with sectors like real estate and export-related segments.
    
Arcil's sponsors include State Bank of India and IDBI Bank (holding over 19 per cent each), ICICI Bank (13.26 per cent) and Punjab National Bank (10.01 per cent).
    
At present, there are 13 asset reconstruction companies operating in the country. Banks and other financial institutions, which have lending operations, sell a part of their bad loans at a discounted rate to ARCs with the intention of cleaning up their balance sheets.
    
Arcil's retail debt recovery division, Arms, currently has a portfolio of around Rs 2,000 crore, of which Rs 400 crore has been recovered by the company, Khasnobis said.
    
The retail arm, which was launched last year, operates through 16 offices across the country.
    
Another leading ARC, the International Asset Reconstruction Company, bought bad assets worth Rs 500 crore in FY'10 from five to six banks, the company's managing director and CEO, Birendra Kumar, said.