Two new bids have recently been received by creditors of the debt-ridden Lavasa township, which was earlier under the control of Hindustan Construction Company (HCC). The outstanding loans currently amount to Rs 6,000 Crore. Both Dhir and Darwin Projects did not respond to queries sent by Moneycontrol. Emails to Lavasa's Insolvency Resolution Professional (IRP) Shailesh Verma also remained unanswered. People in the know said that the two bids come with the condition that the project will receive environmental clearance. The lenders to the project, who include Bank of India, Axis Bank, L&T Finance, and asset reconstruction companies Arcil, Edelweiss, and Acre, had met on August 11.

Asset reconstruction companies (ARCs) are eyeing stressed retail and small business borrowers as the next big growth opportunity as banks see more stress building up in these sectors, according to Pallav Mohapatra, managing director and chief executive officer, Asset Reconstruction Company (India) Ltd (Arcil). ARCs can focus on acquiring and recovering small-ticket bad loans with the help of technology following the creation of the National Asset Reconstruction Company Ltd (NARCL), Mohapatra said in an interview. Lenders have decided to initially transfer 22 bad loan accounts totalling ₹89,000 Crore to the proposed NARCL, aiding the cleanup of their balance sheets. The aggregate amount of bad loans likely to be transferred in tranches will be ₹2 trillion.

Creditors to the former Hindustan Construction Company (HCC) controlled Lavasa township have received two bids for their Rs 6,000 Crore loans outstanding in a third round of bids for the debt-laden company. Union Bank of India (UBI) is the lead lender in the project with an outstanding loan of Rs 600 Crore. Other lenders include Bank of India, Axis Bank, Punjab National Bank and State Bank of India. L&T Finance, the NBFC from the engineering to IT L&T group, is also a creditor along with asset reconstruction companies Arcil, Edelweiss, and Acre. Lenders have been frustrated with the multiple pullbacks by bidders since the account was taken to the National Company Law Tribunal (NCLT) in 2018.

The National Asset Reconstruction Company Ltd, (NARCL), which is slated to become the mother of all Asset Reconstruction Companies (ARCs), will prompt existing ARCs to change their business orientation and start focussing on buying the stressed retail and MSME assets, according to Pallav Mohapatra, MD & CEO, Asset Reconstruction Company (India) Ltd (Arcil). He emphasised that ARCs have a huge business opportunity to buy stressed assets aggregating about ₹1 Lakh Crore in the retail and micro, small and medium enterprise (MSME) segments. Stressed assets with principal outstanding of ₹500 Crore and above, aggregating about ₹2 Lakh Crore, are expected to be transferred by lenders to NARCL.

The distressed asset market, which had gone into a deep freeze after the outbreak of Covid-19, has started to recover in Q3. Large banks have lined up a string of legacy non-performing assets (NPAs) for sale to asset reconstruction companies (ARCs). The deterioration of household incomes has also led banks to consider the ARC route for retail assets and the activity in this segment is now 30-40% higher than pre-pandemic levels. In fact, latency is one of the key factors driving the series of deals right now. Aswini Sahoo, executive vice-president and chief investment officer at Asset Reconstruction Company (India) (Arcil), said, “There are deals that should have happened in the early part of this year which have now got bundled together in the last few months. We will see some more large names in the power sector, which could get closed in the next quarter.”