{"id":38912,"date":"2022-12-31T01:55:55","date_gmt":"2022-12-31T01:55:55","guid":{"rendered":"http:\/\/www.brandon.ddtest.info\/multisite-test\/global-investors-cool-on-indias-bad-debt-reconstruction-firms\/"},"modified":"2022-12-31T01:55:55","modified_gmt":"2022-12-31T01:55:55","slug":"global-investors-cool-on-indias-bad-debt-reconstruction-firms","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/global-investors-cool-on-indias-bad-debt-reconstruction-firms\/","title":{"rendered":"Global Investors Cool On India\u2019s Bad Debt Reconstruction Firms"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>(Bloomberg) &#8212; Indian asset reconstruction companies, which once attracted global investors on hopes of large fees in the resolution of soured loans, are losing luster as the bad loan situation improves and regulatory changes bite.<\/p>\n<p>Most Read from Bloomberg<\/p>\n<p>Data from an annual report on banking trends from the Reserve Bank of India released this week showed lenders\u2019 sale of stressed assets to ARCs, as these companies are known, has fallen.<\/p>\n<p>Just 3.2% of the gross non-performing loans were sold to them in the fiscal year ended March 31, 2022 according to the RBI, compared to 3.8% two years earlier and before Covid struck. It was at 2.2% in the year to March 2021, but that was when economic and banking activities were hamstrung by the pandemic.<\/p>\n<p>Also, financial assets securitized by ARCs fell sharply during the same period as the cost for acquiring stressed loans rose, the RBI said. With opportunities to make money shrinking, interest from global investors like Blackstone Inc. and Apollo Global Management may be cooling.<\/p>\n<p>\u201cWe are not likely to see more global capital flowing into ARCs which are at an inflection point with all the regulations and changing market regulations,\u201d said Aniruddha Sen, partner at Mumbai-based law firm Trilegal.<\/p>\n<p>The year\u2019s largest transaction where Yes Bank Ltd. sold $5.9 billion worth of bad loans to private-equity firm JC Flowers &amp; Co. Ltd., is not reflected in the RBI report.<\/p>\n<p>Read: Carlyle-Backed Yes Bank on Turnaround Stressed Assets Hunt (2)<\/p>\n<p>Opportunities Shrinking<\/p>\n<p>Lured by opportunities in India\u2019s banking system \u2014 which until a few years ago boasted of one of the worst bad-debt ratios among major economies \u2014 foreign investors including Bain Capital and Ares SSG, set up shop or bought ARCs.<\/p>\n<p><button class=\"link caas-button collapse-button\" aria-label=\"\" title=\"\" data-ylk=\"elm:readmore;slk:Story continues\">Story continues<\/button><\/p>\n<p>The dire bad loan situation pushed the federal government to announce the setting up of a bad bank in 2021. Latest data on bad loans shows the worst is probably over.<\/p>\n<p>The RBI which is the banking regulator has also tightened norms for ARCs recently. It has asked ARCs to obtain a recovery rating for security receipts from credit raters and disclose the assumptions and rationale to holders.<\/p>\n<p>\u201cForeign entities now prefer to invest in specific assets rather than in ARC equity,\u201d said Hari Hara Mishra, director at UV ARC Ltd. Mishra added the establishment of a bad bank has also seen business being taken away from ARCs.<\/p>\n<p>Read: Foreign Investors Put More Capital in India\u2019s Distressed Assets<\/p>\n<p>Therefore, even as foreign institutional investors are putting more capital into stressed assets, ARCs are not the beneficiaries.<\/p>\n<p>\u201cThe RBI data clearly shows lack of interest in selling bad loans by banks to ARCs,\u201d said Pradeep Goel, chairman and managing director at Prudent ARC Ltd.<\/p>\n<p>&#8211;With assistance from Ronojoy Mazumdar.<\/p>\n<p>Most Read from Bloomberg Businessweek<\/p>\n<p>\u00a92022 Bloomberg L.P.<\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/news.google.com\/__i\/rss\/rd\/articles\/CBMiTWh0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9nbG9iYWwtaW52ZXN0b3JzLWNvb2wtaW5kaWEtYmFkLTA1MDQyOTEzNi5odG1s0gFVaHR0cHM6Ly9maW5hbmNlLnlhaG9vLmNvbS9hbXBodG1sL25ld3MvZ2xvYmFsLWludmVzdG9ycy1jb29sLWluZGlhLWJhZC0wNTA0MjkxMzYuaHRtbA?oc=5\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Bloomberg) &#8212; Indian asset reconstruction companies, which once attracted global investors on hopes of large fees in the resolution of soured loans, are losing luster as the bad loan situation improves and regulatory changes bite. Most Read from Bloomberg Data from an annual report on banking trends from the Reserve Bank of India released this &hellip;<\/p>\n","protected":false},"author":1,"featured_media":38913,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/38912"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=38912"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/38912\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/38913"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=38912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=38912"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=38912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}