Omkara ARC makes all-cash bid for HDFC's non-performing loan portfolio

24 Mar 2023 , 08:10 AM

Omkara Asset Reconstruction Company has bid Rs1,195 crore for India’s leading mortgage lender HDFC’s wholesale bad loan portfolio, which includes several developer loans, including the Radisson Blu Hotel in Ghaziabad.

Omkara ARC’s offer for the loan portfolio is a full cash bid.

Sources reveal that several prominent asset reconstruction firms reviewed HDFC’s loan portfolio, with Omkara ARC emerging as the sole bidder for the complete portfolio. 

HDFC is currently assessing the offer and is anticipated to make a decision within the next few weeks. To optimize recovery, the lender may seek additional bids. HDFC is on track to finalize its proposed merger with HDFC Bank over the next six months.

As per an insider, HDFC is not in a hurry to finalize the deal before the end of this month. Apparently, Omkara’s offer is lower than expected, and as a result, HDFC may invite bids from other asset reconstruction companies before proceeding with the sale.

It is predicted that HDFC’s recuperation from the sale of the loan portfolio will be less than what it was in previous rounds. In an earlier transaction, Assets Care and Reconstruction Enterprise (ACRE) paid Rs 270 crore for four corporate accounts from HDFC, which had a total loan value of Rs 577 crore. This led to a 47% recovery rate.

HDFC has put up a portfolio for sale, which comprises a loan of Rs 600 crore extended to the Radisson Blu hotel located in Ghaziabad, and approximately Rs 595 crore worth of loans granted to six to seven real estate developers in various cities.

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