Invent ARC eyes large ticket NPAs

Intends to tap bank credit-line for financing; the company has AUM worth Rs 1,530 cr

In a change of business strategy, Invent Assets Securitisation and Reconstruction Ltd is looking at acquiring large-ticket stressed accounts and would tap bank credit lines to grow business.

Invent is promoted by professionals including M N Singh, former Mumbai Police commissioner, and G N Bajpai, former chairman of Securities and Exchange Board of India. It primarily focussed on small and medium size accounts and used inter-corporate deposits and securities deposits to fund assets.

The company commenced operations in March 2009 and is currently a moderate-sized asset restructuring company (ARC) with assets under management (total managed securities receipts) worth Rs 1,530 crore as on March 31, 2015. Of this, it has securities receipts (SRs) of Rs 180 crore on its own balance sheet. Additionally, it has assets worth Rs 290 crore acquired in cash deals.

The SME-focused entity has done a couple of large acquisitions in the past 12-18 months. Till date, the company has relied on inter-corporate deposits and security deposits to fund its assets. It is now expected to tap bank funding as well.

CRISIL has assigned “BBB-” rating to the long-term bank facility of Invent ARC.

The company’s major resolution strategy is settlement with the borrower. In line with its aim of quick resolution of assets, Invent holds discussions with the borrower/stake holder even before acquisition of debts.

This has resulted in a relatively smooth and quick recovery in many cases.

For 2014-15, Invent ARC made net profit of Rs 2.36 crore on total income of Rs 19.88 crore, compared with net profit of Rs 5.22 crore on total income of Rs 12.48 crore for 2013-14. The fall in profit was mainly on account of technical write-off of bad loans worth Rs 9.08 crore.