Indiabulls looking to exit ARC business, in talks for loan portfolio sale

By Ankur Mishra

Indiabulls Group is looking to exit the asset reconstruction (ARC) business and is in talks with buyers to sell its loan portfolio, FE has learnt from sources close to the development. Indiabulls Asset Reconstruction Company (IARCL) is in talks with Asset Reconstruction Company India (Arcil) and Davidson Kempner of the US for sale of its Rs 1,500-crore loan portfolio.

Indiabulls is looking to exit the ARC business at a time when the government is in the process of setting up a bad bank. Finance minister Nirmala Sitharaman had announced setting up of an asset reconstruction company and an asset management company during the Budget speech.

“IARCL has decided to exit the asset reconstruction (ARC) business a few months back after assessing market conditions,” said one person aware of the development. The decision was taken before the announcement of the bad bank by the government.

Out of IARCL’s Rs 1,500-crore loan portfolio up for sale, around Rs 900 crore is in the form of security receipts, sources said. The portfolio has exposure to retail as well as small and medium enterprises and mortgage loans. Final details of the deal are yet to be worked out.

Indiabulls started its asset reconstruction business by setting up IARCL in 2017. The company was granted certificate of registration by the Reserve Bank of India to act as a securitisation and asset reconstruction company on May 19, 2017. Indiabulls Ventures owns 100% of equity capital in IARCL, according to its website. The company was positioned to look for opportunities in both the real estate and non-real estate segments.

The parent company, Indiabulls Ventures, was recently renamed as Dhani Services with an aim to put the entire consumer business in the healthcare and finance sectors under one name by the group. Dhani Services had posted revenues of Rs 337 crore and a loss of Rs 80 crore during the December quarter of the current fiscal.