The National Asset Reconstruction Company Ltd (NARCL) has acquired its first stressed asset — Jaypee Infratech — from lenders. It acquired their exposure aggregating about ₹9,200 crore at a 55 per cent haircut.
IDBI Bank, the lead bank to the consortium of lenders with an exposure of ₹3,750 crore, received ₹253 crore (15 per cent of the ₹1,687.50-crore recovery in cash) and ₹1,434.5 crore (85 per cent of the recovery) in the form of security receipts.
The other lenders will receive cash and security receipts depending on their exposure to the company. The cash recovery is expected to boost banks bottomline in the fourth quarter.
IDBI Bank expects GNPAs, which as of December-end 2022 were at 13.82 per cent, to come down to by 2.2 percentage points following transfer of this account to NARCL.
NARCL, which was set up by banks last year, is aggregating and consolidating select stressed assets (above ₹500 crore each) in the financial system for their subsequent resolution. Public sector banks are holding majority stake in the ARC.
Along with NARCL, a service company/ operational entity, India Debt Resolution Company Ltd (IDRCL), has been floated for resolving these stressed assets. Private sector banks are holding majority stake in the DRC.