NARCL eyes acquisition of stressed loans in Bareilly, Mumbai Metro One

State-owned National Asset Reconstruction Company Ltd. (NARCL) has emerged as the frontrunner to acquire non-performing loans of Rs 1,773 crore in Bareilly Highways Project from a consortium of lenders after no counterbids were received during a Swiss challenge auction on October 30, sources said. The ARC had given an anchor bid of Rs 300 crore for the loans, translating into a recovery of 17 per cent for the lenders.

 

Additionally, NARCL has given an anchor bid of Rs 1,063 crore to acquire stressed loans of Mumbai Metro One from a consortium of lenders, prompting a Swiss challenge auction scheduled on November 28. NARCL’s anchor bid translates to a recovery of 86 per cent for the lenders. If no counter bids are received during the Swiss challenge auction, NARCL will be announced as the winning bidder.

 

An email sent to NARCL did not elicit a response till press time.

 

IDBI Capital Markets and Securities, on behalf of the State Bank of India (SBI)-led consortium of lenders, had invited counterbids to sell non-performing loans in Bareilly Highways Project. NARCL’s anchor bid of Rs 300 crore for the asset was on a 15:85 cash-to-security receipts basis.

 

Bareilly Highways Project is a special purpose vehicle (SPV) 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 the National Highways Authority of India (NHAI).

 

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.

 

Meanwhile, for Mumbai Metro One, the consortium of lenders led by the state-owned Canara Bank, through IDBI Capital Markets and Securities, has sought counter bids to sell Rs 1,226.13 crore of non-performing loans.

 

MMOPL is an SPV that is jointly owned by Reliance Infrastructure and Mumbai Metropolitan Region Development Authority (MMRDA). While Reliance Infrastructure, a part of the Reliance group, holds 74 per cent equity share capital of MMOPL, the rest 26 per cent is held by MMRDA – a Maharashtra government body that is engaged in long-term planning and implementation of strategic projects and financing infrastructure development in the Mumbai Metropolitan Region.

 

NARCL is eyeing stressed debt acquisitions totalling Rs 1.25 trillion. Of the Rs 1.25 trillion, evaluations for assets valued at around Rs 40,000 crore are currently underway, the Economic Survey for 2023-24 had stated.

 

Incorporated in 2021, with majority stake held by public sector banks and the balance by private sector lenders, NARCL has the mandate to acquire fully provisioned stressed assets from banks. NARCL acquires stressed debt on a 15:85 cash-to-security receipts structure.

 

As of March 2024, NARCL has acquired stressed debt from 18 accounts worth Rs 92,000 crore.