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Mumbai: Piramal Capital & Housing Finance has sold the outstanding bad loan pool of ₹3,656 crore to Omkara ARC For ₹625 crore, said two sources close to the development.
Piramal recovered 17% from the sale finalized last week. Pool includes accrual accounts as well Dewan Housing Finance Limited (DHFL) and Piramal’s own loan book.
The NBFC had invited bids under the cash-security receipt structure based on the existing offer. Omkara Asset Reconstruction Company submitted a binding offer setting the reserve price for the auction.
However, no other bidder showed interest, leading to the sale to Omkara. The purchase consideration of ₹625 crore will be divided into 15% cash and 85% Security Receipts, which will be subscribed Piramal Capital or his associates.
Spokespeople for Omkara ARC and Piramal Capital both did not respond to a request for comment.
The principal outstanding of the pool as on May 15, 2023 was ₹3,656 crore, spread over 7-8 accounts. Piramal Capital has been actively selling bad loans to clean up DHFL’s stressed book, which it acquired in the bankruptcy auction in 2021.
Piramal had acquired DHFL for ₹34,250 crore, of which ₹14,717 crore was in cash and the remaining amount was ₹19,532 crore through bonds issued to DHFL lenders.
Piramal is looking to sell another large pool of developer loans. Phoenix ARC with Cerberus Capital, Ares SSG with ACRE and Oaktree Capital edelweissPiramal is among the bidders for the group’s ₹2,700 crore stressed debt, one of the largest deals in the distressed sector, which is on an all-cash basis.
During the fourth quarter of FY23, the company concluded four stressed asset monetization transactions through a combination of asset sale and ARC sale. This helped the company to realize over ₹12,500 crore in cash through prompt repayment and resolution proceedings. This includes sale of bad loan portfolio of ₹5,546 crore inherited from DHFL JM Financial property reconstruction.
Earlier, Ares SSG-backed Assets Care and Reconstruction Enterprise (ACRE) had in March bought an original loan of ₹1200 crore spread over 11 loan accounts including Xrbia from Piramal Capital Housing for ₹245 crore. The lender received a recovery of 21% from the sale.
Piramal is focusing on developing a new asset-backed wholesale book known as ‘Wholesale 2.0’ for real estate and corporate middle-market lending.
During the last financial year, the company improved the retail wholesale mix to 50:50, which was 33% retail and 67% wholesale in FY12. The company has generated a bulk of 2.0 AUM in real estate and corporate mid-market lending worth ₹2,792 crore.
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