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State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB), Union Bank of India (UBI), Canara Bank, and Bank of Maharashtra (BoM) on Friday announced subscription to the shares of India Debt Resolution Company Ltd (IDRCL).
As per the Union Budget 2022 announcement, a National Asset Reconstruction Company Ltd (NARCL) and an Asset Management Company (IDRCL) have been set up by lenders (public sector and private sector banks and financial institutions) to consolidate and take over the existing stressed debt in the banking/ financial system and then manage and dispose the assets to Alternate Investment Funds and other potential investors for eventual value realisation.
The NARCL will acquire assets by making an offer to the lead bank. Once NARCL’s offer is accepted, IDRCL will be engaged for management and value addition.
SBI said it has subscribed to 99,000 shares of Rs 10 each of IDRCL. “Investment of equity stake of 12.30 per cent by SBI to be reduced to 5 per cent by March 31, 2022,” the public sector bank (PSB) said in a stock exchange notice.
BoB said it has subscribed to 99,000 shares of Rs 10 each of IDRCL. “Investment of equity stake of 12.30 per cent by Bank of Baroda to be reduced to 9.90 per cent by March 31, 2022,” the PSB said in a stock exchange notice.
PNB said it has subscribed to 90,000 shares of Rs 10 each of IDRCL. The PSB added that initially its subscription will amount to a stake of 11.18 per cent. But the same will be reduced to 5 per cent when all other investing banks will infuse their respective share of capital.
UBI has subscribed to 99,000 shares of Rs.10 each of IDRCL. The PSB said initially its subscription will amount to a stake of 12,30 per cent. This stake will be brought below 10 per cent in due course of time on subscription by other PSBs / FIs.
Canara Bank has subscribed to 1.20 lakh shares of Rs 10 each of IDRCL. Initially Its subscription will amount to a stake of 14.90 per cent. This will be reduced to 5 per cent by March 31, 2022.
BoM has subscribed to 50,000 shares of Rs 10 each of IDRCL. ”Investment of equity stake of 6.21 per cent by Bank of Maharashtra to be reduced to 4 per cent by March 31, 2022,” the public sector bank said.
PSBs and public Financial Institutions (FIs) will hold a maximum of 49 per cent stake in IDRCL and the rest will be with private sector lenders. PSBs will maintain 51 per cent ownership in NARCL and and the rest will be with private sector lenders..
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