IDBI Capital calls for bids on Rs 1,772 crore SBI-led highway bad loans

State-owned NARCL has submitted an anchor bid of Rs 300 crore for exposure, prompting a Swiss auction scheduled for October 30

IDBI Capital Markets and Securities has invited expressions of interest (EoIs) from entities interested in acquiring Rs 1,772.7 crore of non-performing loans of State Bank of India (SBI)-led consortium of lenders in Bareilly Highways Project through a Swiss challenge auction on October 30.

According to sources, state-owned National Asset Reconstruction Company (NARCL) has submitted an anchor bid of Rs 300 crore for the exposure on a 15:85 cash-to-security receipts basis. This bid has been set as the reserve price, based on which counter bids will be invited in the Swiss auction.

The consortium of lenders includes Punjab National Bank, India Infrastructure Finance Company (IIFCL), Bank of Baroda, Indian Overseas Bank, and Union Bank of India. Within this consortium, SBI has the highest exposure at Rs 693.21 crore, followed by Punjab National Bank at Rs 257.71 crore, IIFCL at Rs 253.45 crore, Indian Overseas Bank and Union Bank of India at Rs 193 crore each, and Bank of Baroda at Rs 182 crore, according to the auction document.

The EoIs have to be submitted by October 7, after which interested entities will have until October 28 to conduct due diligence on the asset. The Swiss challenge auction is scheduled for October 30, wherein the entities will be invited to submit counter bids with a minimum increase of Rs 15 crore over the reserve price.

NARCL, as the anchor bidder, will be declared the successful bidder for the asset if no counter bids are received during the auction. However, if a counter bid is submitted, NARCL will have the opportunity to match it. If NARCL successfully matches the counter bid, it will be declared the successful bidder. Otherwise, the counter bid will be declared as the successful bid.

Bareilly Highways Project is a special purpose vehicle promoted by Era Infra Engineering and OJSC- Sibmost to undertake four-laning of the existing two-lane road on NH-24 from Bareilly to Sitapur in Uttar Pradesh under National Highways Development Programme Phase III of NHAI.