Banks burdened with $140bn NPAs
Mumbai-based Edelweiss is set to raise US$1.6 billion to invest in stressed assets in India, with US$600 million of it coming from CDPQ of Quebec, according to a ResearchAndMarkets report.
The investment would be in the Non-Performing Assets worth US$140 billion that have burdened Indian banks as of June 2018.
India has set up a panel of experts to explore mechanisms for resolving the burgeoning bad debts plaguing its financial sector, according to the report released on 14 Nov 2022.
The “Non-Performing Assets and Business Case Evolution of M&A Prospects in India” report covered Iron-Steel & Basic Metals, Automobile, Textile, Paper Product, Rubber, Gems & Jewellery, Processing Industry.
The incidents of NPA’s have witnessed an aggressive growth in India since FY’2013, inflating to US$129.3 billion in Dec 2017 against a value of US$38.8 billion observed in Dec 2013.
Sounds contrary to the country’s economic situation which boasts India amongst the fastest growing economies of the world. Ironically, the growth rate is not only fast-paced for high economic activities but also for the watch list of projects which has seen a consistent rise from FY 2013, said the report.
As on Dec 2017, the gross NPA with public banks stands to be Rs.777,280 crores and that with private sector banks hovers around Rs.107,796 crores.
SBI will be the biggest beneficiary of Tata’s acquisition of Bhushan steel as its bottom line will go up by Rs.1,300 crores, said the report.
Among other seeking NPA-related investment opportunities, JSW steel is looking for stressed assets in India and overseas for its 50 MTPA production target, according to the report.
The Government is also working on SAMADHAN (Scheme of Asset Management and Debt Change Structure) scheme similar to what the SBI-led group of bankers came out with to takeover unsustainable debt of stressed power plants to avoid their liquidation.
Also, there are plans to rope in National Investment & Infrastructure Fund (NIIF) as an investor to set up an asset reconstruction company that will take over the stressed loans of state-run banks, said the report. fiinews.com
