NARCL places Rs 631-cr anchor bid for BGR Energy stressed debt auction

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

State-owned National Asset Reconstruction Ltd. (NARCL) has placed an anchor bid of ₹630.67 crore for the stressed debt of Chennai-headquartered BGR Energy Systems, which amounts to over ₹3,500 crore, from a consortium of lenders through Swiss challenge auction, said a source aware of the development.

 

NARCL has placed the bid on a 15:85 cash:security receipt basis, in which it will pay 15 per cent of the total consideration offered upfront, and the balance 85 per cent through issuance of security receipts.

 

The anchor bid translates into a recovery of 18 per cent for the lenders.

 

A consortium of lenders, including State Bank of India (SBI), Canara Bank, IDBI Bank, Punjab National Bank, Indian Bank, Bank of India, Union Bank of India, Central Bank of India, and Bank of Baroda have a fund-based outstanding of ₹2,920.49 crore and non-fund based outstanding of ₹591.84 crore as on 31st July, 2025, aggregating to ₹3512.33 crore towards the company.

 

 

SBI has the highest exposure to the company’s total debt, amounting to ₹1,698.94 crore, which accounts for over 64 per cent of the total amount owed to lenders. It is followed by Canara Bank with an exposure of ₹526 crore, IDBI Bank with ₹271 crore, Punjab National Bank with ₹270 crore, Indian Bank with ₹243.59 crore, and Bank of India with ₹208 crore. The remaining exposure lies with Union Bank of India, Central Bank of India, and Bank of Baroda.

 

ICICI Bank, Axis Bank, and Kotak Mahindra Bank have a combined exposure of ₹165 crore to the company. However, this portion is not part of the debt being sold.

 

An email sent to NARCL seeking comments did not receive a response by the time of publication.

 

According to the bid document, the anchor bidder expects an additional net recovery of ₹350 crore for the lenders over the offer price. Additionally, any amount recovered over and above the estimated upside will be shared between the anchor bidder and other security receipt holders.

 

Separately, IDBI Capital Markets and Securities, which has been appointed as the process advisor by the lenders, has invited counter bids for the stressed debt of BGR Energy Systems for the Swiss challenge auction that will be conducted on September 3. Interested entities were asked to file an expression of interest (EoI) by August 10, following which these entities will be allowed to do due diligence till September 2.

 

During the Swiss challenge auction, the interested entities would have to bid 5.55 per cent over the anchor bid of NARCL of ₹630.67 crore.

 

If there are any counterbids during the auction exceeding NARCL’s base bid, the highest bidder will be declared on September 6. Following this, NARCL will be given the right of first refusal. As the anchor bidder, NARCL has the option to match the highest counterbid, either on an all-cash basis or on a cash-cum-security receipt basis. If NARCL matches or exceeds the counterbid, it will be declared the “successful bidder.” Otherwise, the highest counterbidder will be declared the successful bidder.

 

However, if there are no counterbids or no participation in the auction, NARCL’s anchor bid will automatically be declared the successful.

 

BGR Energy Systems is a prominent Indian engineering and construction company, headquartered in Chennai, Tamil Nadu.

 

Established in 1985 as a joint venture between Germany’s GEA Energietechnik GmbH and Indian entrepreneur BG Raghupathy, the firm originally manufactured condenser tube cleaning systems, debris filters, and rubber cleaning balls for thermal and nuclear power plants. In 1993, Raghupathy and his family took over as sole shareholders, and the company was renamed BGR Energy Systems in 2007.

 

NARCL has acquired 26 stressed accounts with an exposure of ₹156,323 crore in the last three financial years, from financial year 2023 (FY23) to FY25. NARCL has been set up to clean up the legacy stressed assets with an exposure of ₹500 crore and above in the Indian banking system.

 

The company offers adaptable acquisition structures comprising an optimal mix of cash and security receipts to the selling banks and financial institutions across sectors and geographies.

 

Business Standard earlier reported that for FY26, NARCL has identified seven accounts with stressed debt of ₹ 11,738 crore for acquisition.