HDFC sells more bad loans to ACRE ARC, Real Estate News, ET RealEstate

July 6, 2023

MUMBAI: HDFC, which merged with HDFC Bank last week, has sold a portfolio comprising eight real estate accounts, including prominent names like Tridhaatu Realty, ATS Infra, Paranjape Schemes and Puranik Builders for a total value of ₹305 crore to Assets Care and Reconstruction Enterprise (ACRE) ARC.

The combined outstanding loan amount of this pool was approximately ₹1,300 crore, translating into an immediate recovery of around 23%. ACRE ARC, backed by Ares SSG, emerged as the anchor bidder, offering ₹305 crore in upfront cash for the purchase. Additionally, HDFC is entitled to 65% of all recoveries above ₹85 crore for one group of accounts.

HDFC had invited interested bidders to submit counter bids above the base bid of ₹305 crore, with a 10% mark-up, by June 24. However, no further bids were received, leading to the decision to proceed with the sale to ACRE ARC.

The accounts included in the portfolio were a mix of special mention accounts and non-performing loans, making the sale a strategic move for HDFC. This is the third pool of loans that HDFC has sold to ACRE ARC. Last year, in June, HDFC sold four corporate accounts to ACRE ARC for ₹270 crore against the total loan of ₹577 crore, resulting in recovery of 47%. In October, HDFC sold ₹1,180 crore loan to ACRE for ₹602 crore, resulting in 51% recovery for the mortgage lender. HDFC Bank’s spokesperson as well as ACRE’s spokesperson did not comment on the matter.

HDFC has been selling some developer stressed loans before merging with the bank. It had been selling loans over the last few quarters after the announcement to merge with the bank. HDFC is currently evaluating a one-time settlement (OTS) offer from promoter DP Jain regarding the sale of two Radisson Blu hotels in Ghaziabad. The bank has received an offer of ₹315 crore from the promoter, while Prudent ARC has submitted a binding offer of ₹311 crore.

The mortgage lender had reported gross non-performing assets (GNPA) for individual accounts of 0.75% as of March 31, 2023.

  • Published On Jul 6, 2023 at 09:00 AM IST

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