Asset Reconstruction Companies

NARCL has bid Rs 630.67 crore to acquire over Rs 3,500 crore of stressed debt of BGR Energy Systems via a Swiss challenge auction, offering lenders 18 per cent recovery

The association flagged the risk of rising stress in the system due to the likely adverse fallout of high tariffs being imposed by the US on Indian goods exports

ARCs see 15.8 per cent growth in SR redemptions to Rs 43,256 crore in FY25; SR issuance declines, total dues acquired rise to Rs 16.14 trillion

Markets regulator Sebi has allowed all non-banking financial companies (NBFC), including housing finance companies, to invest in security receipts issued by Asset Reconstruction Companies (ARCs), a move aimed at encouraging investments in the bad loans space. This has widened the scope of participants who can acquire security receipts from ARCs, thereby boosting liquidity in the distressed asset market. ARCs are set-up to acquire bad loans from banks and financial institutions after appropriate haircuts and issue security receipts (SRs). In a gazette notification issued on February 28, Sebi said, "all NBFCs including HFCs regulated by the Reserve Bank of India (RBI) are hereby specified as qualified buyers for the purposes of SARFAESI Act (the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002)". This comes with safeguards to avert defaulting promoters from claiming back the secured assets through SRs. Sebi said that su

The revised norms mandated that the committee should be chaired by an independent director and have a minimum two independent directors, including the chair

As per the new guidelines, every Asset Reconstruction Company must establish a Board-approved policy that governs the settlement of borrower dues

State-run Indian Overseas Bank on Thursday said it is selling non-performing assets of Rs 11,500 crore to asset reconstruction companies. The Chennai-headquartered lender said it is selling 46 loan accounts and invited expressions of interest from the ARCs, according to an official statement. The sale will be conducted through an e-auction under the open auction method on a portfolio basis, it said, adding that the portfolio comprises accounts financed under a consortium arrangement, with some admitted under NCLT. Prospective buyers can bid on a portfolio basis, individual accounts, or groups of accounts, it added. IOB Managing Director and Chief Executive Ajay Kumar Srivastava said when it comes to resolving stress, it wants to focus on value maximisation through recovery measures, including invoking SARFAESI actions, compromise settlements, and sales to ARCs. Eligible ARCs and other transferees can submit their EoI by January 18 to participate in the e-auction scheduled for Janu

The consortium of lenders includes Punjab National Bank, India Infrastructure Finance Company (IIFCL), Bank of Baroda, Indian Overseas Bank, and Union Bank of India

After the revision in reserve price, NARCL and Omkara ARC put in binding bids to acquire the portfolio of NPAs, and subsequently, an auction was conducted to determine the winning bidder

Healthy economic growth and buoyant residential demand across housing segments in the top six cities will lead to 10-12 per cent growth in residential realty demand this financial year

Promoters in an Indian market are large shareholders who can influence company policy and, according to regulatory definitions, are prospective owners or directors of the company

The central bank also bans Edelweiss arm ECL Finance from undertaking any structured transactions

Swaminathan J urged ARCs to adopt an approach where there is compliance "with both the letter of the regulation and also its spirit," the central bank said in a statement

Bidders interested in two insurance joint ventures

The board of private lender Bandhan Bank has approved a proposal to transfer the housing finance NPAs to an asset reconstruction company. In a regulatory filing on Thursday, the bank said the housing finance NPAs will have days past due (DPD) of more than 180 days. The outstanding amount that will be transferred to the company is Rs 775.62 crore as on September 30, 2023. The lender had received a binding bid of Rs 280.39 crore for the NPA portfolio on outright cash consideration basis, it said. It will go for bidding as per the Swiss Challenge Method, and the decision of the sale will be taken based on extant guidelines governing the bidding process and the relevant policy of the bank, the filing said. Meanwhile, Bandhan Bank also said it has signed an MoU with the Assam government, securing the mandate to collect revenue on the accounting portal of the state called GRAS. Under the agreement, consumers can pay all kinds of utility taxes of the Assam government as well as examinat

Recoveries by asset reconstruction companies (ARC) from retail loan portfolios have slowed down to 35 per cent since the launch of the one-time settlement (OTS) scheme in October last year, a domestic rating agency said on Thursday. The ARCs have started following measured steps to ensure realizations, which has slowed down the pace of recovery, and the recovery timelines can have got stretched by three to four quarters, India Ratings and Research said in a report. Recoveries across retail loan, including housing and ones to micro, small and medium enterprises, have seen a drag, coming at 35 per cent of the principal outstanding during June-December 2022 review cycle, the agency said. The rating agency said a change in prescribed norms, which now require an independent advisory committee to examine all settlement of dues with borrowers including retail, SME and MSME loans may be resulting in this and added that as per OTS, all the methods of recoveries shall have to be exhausted ...

In a Q&A, the MD & CEO of the firm dwells on its business model and the focus on retail assets to drive volume, going forward

The asset reconstruction industry is set to clock the best growth this fiscal as their asset under management is expected to increase by almost 10 per cent to Rs 1.1 lakh crore, a report said on Thursday. The 29-player ARC (asset reconstruction company) industry began its journey in the second half of 2002 and has since undergone radical regulatory changes and challenges. With the beginning of operation of public sector National Asset Reconstruction Company Limited (NARCL) and rising popularity of the Insolvency and Bankruptcy Code (IBC) effective from May 2016 also pose challenge for the ARC industry. Another major challenge is the steep fall in banks' non-performing assets (NPAs), which is set to fall to under 5 per cent by March, down from over 11 per cent in FY18. Assets under management (AUM) of ARCs are set to grow 9.8 per cent to a five-year high this fiscal, driven by a few large transactions to Rs 1.19 lakh crore. The AUM stood at Rs 1.09 lakh crore in FY22 and at Rs 1.03

They will have to reduce unrealised management fees where the net asset value of the Security Receipts has fallen below 50 per cent of the face value

Lenders may get nearly 45% of the admitted claim of Rs 32,750 crore from NARCL