Prudent ARC submitted a bid for Saraiwwalaa AGRR Refiners, while JC Flower Asset Reconstruction Limited bid Rs. 61 crore for JP Healthcare. Maximus ARC Limited placed a bid of Rs. 27 crore for RCM Infrastructure. CFM ARC bid Rs. 16.29 crore for Green World International and Ramchand Baboo Mall & Company. All bids fall under the 100% upfront cash category.
The bank received the bids on June 27 and plans to proceed with the Swiss auction based on the anchor bids on July 5. The highest bids received for each account will serve as the floor price during the auction. During the Swiss challenge, if a counter bid exceeds the floor price by a minimum markup of 5% to 15%, the original bidder will be given a chance to match the counter bid. If the original bidder matches the counter bid, they will be declared the successful bidder. If no counter bids are received, the original bidder will win by default.
Union Bank of India had set a reserve price of Rs. 55 crore against a total loan of Rs. 335 crore, expecting recovery of 15% for Saraiwwalaa AGRR Refiners. It set a recovery expectation is 89% or Rs 61 crore against debt of Rs. 68 crore for Jaypee Healthcare and 58% or Rs. 27 crore for RCM Infrastructure, which has a debt of Rs. 46 crore. Some of the bank’s recovery expectations exceeded what ARCs were willing to pay, resulting in fewer bids.
Among the 25 accounts, Leo Meridian Infra Projects was also on sale, with a total debt of Rs. 263.53 crore and a reserve price of Rs. 149 crore. “The reserve price was high for a few accounts, and that is why we could not bid,” said an ARC representative who had intended to bid for two of the listed accounts.
Union Bank of India’s has been selling down troubles loans in order to boost its recovery efforts and Improve asset quality. Earlier this year, the lender had met with heads of ARCs to gauge interest in purchasing its bad loans. Following these discussions, the lender listed 25 loan accounts for sale to the ARCs.The lender is targeting a gross recovery of Rs. 16,000 crore and looking to reduce slippages to below Rs. 11,500 crore in the current financial year. The bank’s goal is to lower its gross NPA ratio to below 4%. The gross NPA ratio stood at 4.83% in December 2023 and improved slightly to 4.76% by March 31, 2024. The bank has kept slippages below Rs. 12,000 crore and achieved a gross recovery of Rs. 18,554 crore in FY24.
