[ad_1]
mortgage lender Housing Development Finance Corporation ,HDFC) is making a last-ditch effort to reduce stressed loans of about ₹2,000 crore given to developers before its merger with the bank that was born nearly three decades ago. These loans are spread over 7-8 accounts, and include advances to local owners Radisson Blu Two banking sources familiar with the development told ET.
HDFC It is currently engaged in talks with asset reconstruction companies to sell these loans, the two sources said. Alvarez & Marsal, a consulting firm, is actively seeking potential buyers for the loans, he said. ,HDFC intends to sell a portion of its distressed loans in preparation for its merger with HDFC bank, The merger is likely to be finalized by the beginning of the next quarter,” said the first of the two executives quoted above.
Some loans may include NPAs
“The loan portfolio currently stands at around Rs 2,000 crore, though HDFC continues to include or exclude certain loans from this pool,” the person said.
A spokesperson for HDFC did not respond to an email query, while a spokesperson for Alvarez & Marsal did not immediately respond.
Some of these loans may include non-performing assets (NPAs), while some others may be stressed, but have not been formally declared as NPAs yet.
In March, HDFC had showcased some of these accounts for possible sale, but ultimately did not proceed due to lower-than-expected recovery prospects. It had sold only Rs 150 crore in bad loans – its exposure to Matoshree Developers – to Omkara ARCsaid both the sources cited above.
Omkara ARC offer
Omkara bought the outstanding loan of Rs 150 crore of Matoshree Developers for Rs 50 crore, which includes a recovery of 33% for HDFC.
During the last quarter, HDFC had received bids for the stressed asset from Omkara ARC for around Rs 1,100 crore, but the bid price fell short of mortgage lenders’ expectations, resulting in the sale not going through.
In FY23, Assets Care and Reconstruction Enterprise (ACRE) had bought developer loans at almost 50% of the loan value twice. They disbursed Rs 270 crore against the total loan of Rs 577 crore, resulting in a recovery of 47% in Q1 FY2023 and Rs 602 crore for a loan pool of Rs 1,180 crore, resulting in a recovery in Q3 FY2023. There was a recovery of 51%.
HDFC’s asset quality has improved over the past few quarters with individual gross non-performing assets (GNPAs) coming down from 0.99% to 0.75% as on March 31, 2023. Non-individual GNPA declined from 4.76% to 2.9%. The total reconstituted pool stood at 0.6% of assets under management (AUM), down from 0.8% in the previous year.
The company management expects the effective date of the merger to be in the month of July.
is mitigating some non-personal exposures ahead of the impending merger with HDFC HDFC bank, Non-personal loans continued to decline, primarily due to the reduction of certain exposures stemming from payoffs, resolutions and mergers of previous facilities.
[ad_2]
Source link