Reliance ARC mulls a fund for big-ticket NPAs

After stabilising its business in retail and small & medium enterprise (SME) bad loans, Reliance Asset Reconstruction Company (RARC) is looking to acquire stressed loans of large firms for resolution.

Anil Ambani-controlled Reliance Capital which has a 49 cent stake in RARC also plans to start stressed asset fund in collaboration with international investors.

Sam Ghosh, executive director and group chief executive of Reliance Capital, told Business Standard the resolution of retail and SME non-performing assets (NPAs) would happen in 12 months.

Rating agency ICRA, which has assigned 'A1+' to ARCs' long-term debt, said the retail and SME asset classes are perceived to be less riskier than big-ticket credits.

ICRA maintains its 'stable' outlook on ratings and factors in the comfortable capitalisation profile of RARC with low gearing. It might increase its stake further as revised rules allow sponsors to hold 100 per cent stake. Corporation Bank and Indian Bank are the other sponsors of RARC.

Ghosh said resolution for ticket loans would take three to four years. Piramal Enterprises is also said to be working on plans to float stressed assets fund for large loans.