IFCI to sell NPAs of Amtek Auto, Tilaknagar Industries

Thirteen bad loans with exposure of Rs 875 crore to be sold

Government-owned finance company IFCI is selling 13 bad loans, with exposure of Rs 875 crore, to make its balance sheet cleaner. The sale includes dues of Amtek Auto (Rs 386 crore) and Tilaknagar Industries (Rs 200 crore).

Amtek Auto’s net loss was Rs 755 crore in the September quarter, from Rs 158 crore in the same quarter a year before. In December, it told the BSE exchange the refinancing of debt approved by lenders under a corrective action plan was pending as some banks were yet to give a nod.    

IFCI executives said they were focusing on reducing their bad loans and improving recoveries. This sale of 13 non-performing assets (NPAs) is the first such in the current financial year; it has also made provisions for bad loans in line with regulatory norms.  

While the Delhi-based company reported the net profit in the September quarter, it is saddled with a large pool of NPAs. The drop in net profit was Rs 14.9 crore in the quarter, from a net of Rs 182.6 crore a year before. Operational income declined by 28 per cent to Rs 763 crore, with reversal of income in respect of fresh slippage, pre-payments and low credit offtake. Gross NPAs rose to 22.6 per cent of the total at end-September, from 13.1 per cent in March. Net NPAs were 18.4 per cent of the total, from 9.5 per cent at end-March.

The downgrading of certain standard accounts pushed the tally of bad loans.  Its provision coverage ratio (PCR) declined to 46 per cent in September from 57 per cent in March.

IFCI, in which the government owns 55.5 per cent equity, is without a full-time chief executive. Managing Director Malay Mukherjee and his deputy, Achal Kumar Gupta, quit last month on completion of their contracts. Sanjeev Kaushik, deputy MD of India Infrastructure Infrastructure Finance, is officiating.