You are here: Home » Companies » News
Business Standard

Edelweiss ARC plans to deploy Rs 1,200 crore to acquire bad loans

With improving business environment, it has pegged recoveries to between Rs 5,000 crore and Rs 6,000 crore in FY23. Its assets under management (AUM) stood at Rs 40,251 crore at the end of March 2022

Topics
Edelweiss ARC | assets under management | Bad loans

Abhijit Lele 

edelweiss financial services
Edelweiss Asset Reconstruction Company (Edelweiss ARC) plans to deploy Rs 1, 200 crore in buying out bad loans, mainly from the retail asset pool in the current financial year (FY23)

Edelweiss Asset Reconstruction Company (Edelweiss ARC) plans to deploy Rs 1, 200 crore in buying out bad loans, mainly from the retail asset pool in the current financial year (FY23).

With improving business environment, it has pegged recoveries to between Rs 5,000 crore and Rs 6,000 crore in FY23. Its (AUM) stood at Rs 40,251 crore at the end of March 2022.

The scale of AUM is expected to decline as a few corporate NPAs are now in the market. This is because most of them have been resolved. Deals are also increasingly being done in cash instead of security receipts.

R K Bansal, managing director and chief executive, Edelweiss ARC, said the company made recoveries worth Rs 6,903 crore with focus on optimal resolution and turnaround of portfolio assets in FY22. It invested about Rs 1,308 crore in picking up stressed loan pools during FY22.

In FY21, when the Indian economy was devastated by the first wave of Covid, the ARC’s recoveries were worth Rs 5,430 crore and it deployed (invested) only Rs 474 crore.

The company continues to maintain market leadership position with a share of about 45 per cent in the ARC space. Considering the need for granularity and improved cash flow, retail asset acquisition and resolution are thrust areas, Bansal said.

The ARC remains active in the big-ticket arena, that is, corporate accounts. But volumes are low, given that many big accounts have been resolved or are going to the National Asset Reconstruction Company.

Its board has approved a proposal to raise funds by issuing non-convertible debentures — aggregating Rs 6,000 crore — on a private placement basis. This will be in one or more tranches.

In FY22, the company booked a total income of Rs 899.27 crore (Rs 867.38 crore in FY21). Net profit of the company was Rs 252.67 crore (Rs 185.63 crore in FY21)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, May 01 2022. 23:58 IST
RECOMMENDED FOR YOU