More auctions by banks, financial institutions likely to recover dues: NPAsource.com

An estimated Rs 7,700 crore worth commercial and residential properties with banks and financial institutions are up for sale, according to NPAsource.com, a portal focusing on resolution of stressed assets.

There are around 2,200 units in the commercial category and nearly 11,000 units in the residential segment, said D. K. Jain, Chairman and Managing Director of Atishya Technologies Ltd, which owns the portal, here on Tuesday.

Maharashtra has taken the lead, largely due to Mumbai, in terms of having commercial non-performing assets worth Rs 842 crore, and non-performing assets in residential categories worth Rs 838 crore, according to data compiled by the portal.

Largest share

NPAsource has total NPA properties worth around Rs 27,500 crore registered on its portal spread across 27,626 units.

Commercial NPA properties have a 15 per cent share in value term, while residential properties have a 13 per cent share. The biggest chunk of NPA properties fall under the industrial land and building category, with over 65 per cent share in value terms.

Elaborating on the findings, Jain said, “After Maharashtra topping both the commercial and residential categories, comes Delhi, with Rs 686 crore worth of NPA commercial, and Rs 500 crore worth of NPA residential properties.”

Andhra Pradesh was at number three in the residential space, with Rs 497 crore worth of space to be auctioned by banks and financial institutions. Tamil Nadu, West Bengal and Uttar Pradesh were the next among States with the highest value of commercial and residential NPA properties, Jain added.

The single largest commercial property in value terms is an office property at New Delhi valued at Rs 200 crore at the base price. In the residential category, the largest property is a farmhouse in New Delhi, with a base value of Rs 40 crore.

Mumbai has two NPA commercial properties with a base price value of Rs 26.5 crore and Rs 24.6 crore, the study showed.

More in store

“As NPAs in the corporate sector continue to grow in the coming months, there will be more commercial and residential properties which will be put under the auction block by banks and financial institutions to recover their dues.

“A slowdown in the real estate markets across the country has further added to the woes of the lenders, who will not be able to generate higher returns from the sale of mortgaged properties in the residential and commercial spaces,” Jain added.

He noted that a positive turnaround in the realty market, as well as the Indian economy, may take place around May if a stable government is formed at the Centre.

As on March 31, 2013, net NPAs of 40 listed banks were Rs 93,109 crore, which rose to Rs 1,28,533 crore as on September 30, 2013.

(This article was published on December 31, 2013)
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