HDFC gets all-cash offer from Omkara ARC for bad loan portfolio, real estate news, ET Real Estate

India’s Leading Mortgage Lender HDFC have received bids from Omkara Asset Reconstruction Company For its bulk bad loan portfolio worth ₹1,195 crore, which includes several developer loans Radisson Blu Hotel in Ghaziabad. The bid comes before the end of the financial year, but the deal is unlikely to be completed this month.

According to sources, three to four large asset reconstruction companies examined the portfolio, but HDFC eventually received a bid from Omkara ARC for the whole pool. HDFC is currently evaluating the bid, and a decision is expected in the coming weeks. The lender may ask for more bids to maximize recovery. HDFC is expected to complete its planned merger HDFC bank over the next two quarters.

“HDFC is not in a hurry to complete the deal by the end of this month,” said a source. “Onkara’s offer is lower than expected and they may seek bids from other ARCs before closing the deal.”

The recovery for the lender from the sale is expected to be lower than the previous round, Assets Care and Reconstruction Enterprise (ACRE) bought four corporate accounts from HDFC for ₹270 crore against total debt of ₹577 crore, resulting in a 47% % recovery. In October, HDFC sold a loan of ₹1,180 crore to ACRE for ₹602 crore, resulting in a recovery of 51%.

HDFC had requested bidders to bid for the entire pool or select accounts. The portfolio for sale includes a loan of ₹600 crore to Radisson Blu Hotel in Ghaziabad and ₹595 crore to 6-7 other real estate developer loans across multiple cities.

Alvarez & Marsal, a consulting firm, is looking for buyers for the loans, and HDFC is reportedly looking to sell another pool, for which it has not given any indication yet.
Omkara ARC’s bid is all cash. HDFC did not respond to queries related to the bid but said it does not envisage any such deal in March. Omkara ARC did not respond to a request for comment.

HDFC in process of selling huge real estate loans ahead of mega-merger HDFC bank, according to a report by Care Edge RatingsThe merged entity will have total advances of over Rs 22 lakh crore and net assets of over Rs 3 lakh crore, as on December 31, 2022.

HDFC Bank is currently the second largest lender in India with advances of ₹15.2 lakh crore, while HDFC is the largest housing finance company in the country with gross loans of ₹7 lakh crore as on December 31, 2022.