The Aditya Birla group’s proposed asset reconstruction company will focus on bailing out troubled SME loans, Ajay Srinivasan, CEO, Aditya Birla Capital Ltd (ABCL), told BusinessLine . The ARC will begin with the RBI-mandated minimum capital requirement of Rs 100 crore, he added.

There are currently 23 ARCs in India which buy stressed corporate, SME and retail loans from banks and attempt to make recoveries, according to a recent count done by credit ratings agency Crisil.

The agency also said that several of these companies are struggling to infuse capital or raise external funding, and are short of specialist manpower and foresaw consolidation in the sector, particularly by ARCs backed by strong promoter groups. larger ARCs.

Crisil estimated that the total outstanding assets under management with ARCs as on March 31, 2017, was about Rs 75,000 crore.

In July, the Kumar Mangalam Birla-led group had brought its different financial services businesses under one roof with the newly created ABCL, formerly known was Aditya Birla Financial Services Ltd.

The listing of ABCL is the culmination of the composite scheme of arrangement under which Aditya Birla Nuvo Ltd merged with Grasim Industries Ltd, and the financials services undertaking was subsequently demerged into ABCL.

On Friday, ABCL was listed on the stock exchanges as a separate company with presence in insurance, asset management, private equity, corporate lending, brokerage, housing finance and personal finance. As of March 2017, it had aggregate AUM of Rs 2.46 lakh crore and a lending book of Rs 38,800 crore.

ABCL’s opening price was Rs 250 on the NSE, at a market capitalisation of Rs 54,615 crore. At 1pm, the stock was trading down 5 per cent at Rs 237.50.

On June 29, PE firm Premji Invest had picked up 2.2 per cent stake in Aditya Birla Capital for about Rs 704 crore, valuing the latter at Rs 32,000 crore.

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