HDFC Gets Bid from Omkara Asset Reconstruction Co. for Bad Loan Portfolio
HDFC has received a bid from Omkara Asset Reconstruction Company for its wholesale bad loan portfolio valued at Rs 1,195 crore, which includes several developers’ loans including several developer loans including the Radisson Blu Hotel in Ghaziabad. The bid comes ahead of the fiscal year-end but the deal is unlikely to be concluded this month. Three to Four large asset reconstruction companies examined the portfolio but HDFC ultimately received a bid from Omkara ARC for the entire pool. HDFC is currently evaluating the bid, and a decision is expected in the coming weeks. The lender may ask for more bids to maximise recovery. HDFC is expected to complete its planned merger with HDFC Bank in the next two quarters. HDFC is not in rush to close the deal by the end of this month. The offer from Omkara is below expectation and they may ask for bids from other ARC’s before closing the deal. The recovery for the lender from the sale is expected to be lower than in previous rounds with Assets Care and Reconstruction Enterprise (ACRE) buying four corporate accounts from HDFC for Rs 270 crore against a total loan of Rs 577 crore resulting in a 47% recovery. In October HDFC sold a Rs 1,180 crore loan to ACRE to Rs 602 crore, resulting in a 51% recovery. HDFC has requested bidders to bid for either the entire pool or select accounts. The portfolio on sale includes a Rs 600 crs loan for the Radisson Blu Hotel in Ghaziabad and Rs 595 crs for 6-7 other real estate developer loans across several cities. Alvarez & Marsal a consulting firm is seeking buyers for the loan, and HDFC is looking to sell another pool. The bid for Omkara ARC is all in cash. HDFC is in the process of selling bulky real-estate loans before the mega-merger with HDFC bank. According to report by Care Edge Ratings, the merged entity will have total advances of over Rs 22 lakh crore based on December 31, 2022 figures and a net worth of over Rs 3 lakh crore.