HDFC is in the process of selling upto Rs 1,000 crore real-estate loans involving two projects before it proposed merger with HDFC Bank. The mortgage lender has appointed consulting firm Alvarez & Marsal to scout for buyers for the loan.
The two loans are not non-performing accounts as yet but cannot be moved to the bank because of stricter banking norms and hence the lender has decided to sell it. The sale will happen in two tranches. The first auction will be held soon and the second in the last week of March.
HDFC may decide to sell a large pool of over Rs 1,500 crore of loans, depending upon the response it gets from buyers in this round. HDFC reported gross NPAs of 1.23% in the third quarter of FY23. Last year in June HDFC sold four corporate accounts to Assets Care and Reconstruction Enterprise (ACRE) for Rs 270 crores against the loan of Rs 577 crore, resulting in a recovery of 47%. In October ACRE bought a Rs 1,180-crore loan from HDFC for Rs 602 crore, resulting in a 51% recovery for the mortgage lender.
The merger of HDFC and HDFC Bank was announced in April 2022 and is expected to be completed by July this year. HDFC has obtained clearences from various regulators over the last few quarters. Most recently the National Company Law Tribunal gave in-princple approval. Currently HDFC Bank is the second-largest lender in the country with advances of Rs 15.2 lakh crore as of December 31, 2022. The merged entity will have total advances of over Rs 22 lakh crore based on December 31, 2022, numbers and a net worth of over Rs 3 lakh crore.
