Piramal Capital sells bad loans to Omkara ARC
Piramal Capital & Housing Finance has sold a loan outstanding pool of ₹3,656 crore bad loans to Omkara ARC for ₹625 crore, said two sources close to the development. The sale, finalised last week, marks a recovery of 17% for Piramal. The pool consists of accounts acquired along with Dewan Housing Finance Limited (DHFL) and Piramal's own loan book.
The non-banking finance company had called for bids under a cash-security receipt structure, based on an existing offer. Omkara Asset Reconstruction Company provided a binding offer, setting the reserve price for the auction. However, no other bidder showed interest, leading to the sale to Omkara.
The purchase consideration of ₹625 crore will be divided into 15% cash and 85% security receipts, which will be subscribed by Piramal Capital or its affiliates. Both Omkara ARC and Piramal Capital spokesperson did not respond to a request for comment. The principal outstanding of the pool was ₹3,656 crore as of May 15, 2023, spread across 7-8 accounts.
Piramal Capital has been actively selling bad loans to clean up the stressed book of DHFL, which it acquired in a bankruptcy auction in 2021. Piramal had acquired DHFL for ₹34,250 crore, with ₹14,717 crore in cash and the remaining balance of ₹19,532 crore through bonds issued to DHFL lenders. Piramal is looking to sell another large pool of developer loans.
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