IDBI Bank-led consortium seeks EoIs to sell exposure to IVRCL road asset

In Q1FY22, IDBI Bank reported a 318% year-on-year leap successful its nett profit, aided by a betterment from the Kingfisher Airlines account.

A consortium of lenders led by IDBI Bank connected Monday sought expressions of involvement for acquiring its Rs 804-crore vulnerability successful a roadworthy plus developed by IVRCL. The banks privation to merchantability IVRCL Chengapalli Tollways (ICTL) to plus reconstruction companies oregon different fiscal institutions successful enactment with regulatory guidelines.

IVRCL was among the companies named by the Reserve Bank of India (RBI) successful 2017 successful its 2nd database of atrocious assets to beryllium resolved nether the insolvency code. The institution has since gone into liquidation. The roadworthy plus is being offered astatine a reserve terms of `500 crore successful an all-cash deal, implying a maximum haircut of 38%. The consortium has sanctioned loans worthy Rs 862 crore to the asset. The different lenders successful the consortium are Karur Vysya Bank, Union Bank of India, State Bank of India and Bank of Baroda.

Bidders funny successful buying the plus volition person to nonstop successful expressions of involvement (EoIs) by September 9 and the past day for submission of bids is September 27. Thereafter, determination volition beryllium an inter-se bidding among the apical 3 bidders connected September 28. “Once the woody is finalised, the duty deed and different ineligible formalities volition beryllium completed successful the shortest imaginable clip arsenic mutually agreed upon,” IDBI Bank said successful a notice.

Recoveries from ample atrocious assets person been an important origin down immoderate banks turning a nett successful the June quarter. In Q1FY22, IDBI Bank reported a 318% year-on-year leap successful its nett profit, aided by a betterment from the Kingfisher Airlines account. The full betterment from the relationship stood astatine Rs 733 crore.

IDBI Bank MD & CEO Rakesh Sharma said successful July that the slope volition beryllium capable to trim its gross non-performing plus (NPA) ratio by 4-5% done maturation successful the advances oregon the denominator. “Now the authorities has besides travel retired with the National Asset Reconstruction Company Ltd. (NARCL) and we whitethorn transportation immoderate accounts determination arsenic well. Once the NARCL becomes functional, immoderate assets volition beryllium transferred and that would further trim the gross NPA by different 5-6%,” said Sharma. The gross NPA ratio stood astatine 22.71% astatine the extremity of June.

The lender plans to transportation a full of Rs 11,000-12,000 crore of advances to the NARCL, of which unrecorded accounts volition beryllium to the tune of Rs 7,000-8,000 crore, with the remainder being written-off accounts.