Asset Reconstruction Companies

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

The Reserve Bank of India on Wednesday said 10 NBFCs and one asset reconstruction company have surrendered their registration certificates

Financial lenders include State Bank of India, Punjab and Sind Bank, Axis Bank, HDFC Bank, Union Bank of India, IDBI Bank, UCO Bank, and Indian Overseas Bank

Bandhan Bank's announcement of sale of stressed loans to an asset reconstruction company (ARC) will be the first such instance for the private lender, a source in the bank said. The lender had on Wednesday said it will sell stressed loans to an ARC after a portfolio of Rs 8,897 crore was written off. The bank has received binding bid from an ARC, amounting to Rs 801.00 crore..., it had said in an exchange filing. The written off amount was on account of small businesses and agriculture loans (SBAL) or micro-credit advances, the source said. It had become stressed during various phases of operation since the bank's inception as a lender in August 2015. This is for the first time that the bank will sell stressed loans to an ARC, he said. The bidding will be as per the Swiss Challenge Method (SCM) on a binding bid of Rs 801 crore offered by the ARC. Under SCM, the bank will receive bids on the reserve price of Rs 801 crore, and the highest bidder will get hold of the portfolio, the

But they are unlikely to disrupt the securitisation market as such loans constituted only 5% of the total securitisation volume in H1FY23

Company added Rs 600 crore in assets in six months, as it makes recoveries from acquisitions earlier

The asset reconstruction business is in for a big change, but there are doubts if this will lead to better results

The new norms succinctly sum up the RBI's view on how some of the ARCs have been run

Lender said in July gross NPA ratio would dip below 2% after transfer to asset reconstruction company

NARCL has been set up by commercial banks to aggregate and consolidate stressed assets for their subsequent resolution

Jaypee Infratech deal expected to close by early Nov

They have been losing business as the IBC process picks up pace

Lender eyes equity offering by Q4FY23 or early FY24

Three players -- JM Financial ARC, Edelweiss ARC, and ARCIL -- have a dominant presence in the sector with a sound capital base and management bandwidth

Reliance Communications, then owned by Anil Ambani, had to shut down its business operations as a result of its high debt burden and a failed merger with Aircel

RBI allows ARCs to bid for assets in IBC cases

The Reserve Bank on Tuesday raised the minimum capital requirement for setting up an asset reconstruction company (ARC) to Rs 300 crore from the existing Rs 100 crore with an aim to strengthen the securitisation sector which plays a vital role in the management of distressed financial assets. The existing ARCs have been given a glide path to meet the minimum net owned fund (NOF) requirement till April 2026, the RBI said in a circular amending the existing regulatory framework for such entities. "Consequently, any ARC obtaining the certificate of registration on or after the date of this circular shall not commence the business of securitisation or asset reconstruction without having minimum NOF of Rs 300 crore," the circular said, adding the guidelines are effective immediately. Under the earlier guidelines, each ARC was required to frame a board-approved policy laying down the broad parameters for settlement of debts due from the borrowers. Further, the board was permitted to ...