Axis Bank, HDFC Bank to acquire up to 15% stake each in India Debt Resolution Co
In separate exchange filings, Axis Bank and HDFC Bank said that the first tranche of equity investment of Rs 3 crore is expected to be completed by March 31, 2022.
- Mar 29, 2022,
- Updated Mar 29, 2022 3:07 PM IST
Private sector lenders Axis Bank and HDFC Bank on Tuesday said they have signed agreements to acquire up to 15 per cent stake each in India Debt Resolution Company Limited (IDRCL) for a total cash consideration of Rs 7.5 crore each. In September last year, public sector banks had created IDRCL as a step-down asset management company. It has been incorporated with the objective to carry on the business as a debt management company and to do all kinds of debt management, operational management and consultancy services in relation to debt resolution for an asset reconstruction company or investment trust or any other portfolio of securities. In separate exchange filings, Axis Bank and HDFC Bank said that the first tranche of equity investment of Rs 3 crore is expected to be completed by March 31, 2022. Subsequent tranches of equity investment will be made as and when determined by the board of directors of IDRCL, they added. Also Read: Emami's Dermicool acquisition may boost its revenue to Rs 4,000 cr by FY24
Both the lenders said they have received approval from the Reserve Bank of India and Department of Economic Affairs, Ministry of Finance for the investment. On Monday, ICICI Bank also informed the exchanges it would invest Rs 7.5 crore to acquire up to 15 per cent stake in the company and that it expects the investment of first tranche of Rs 3 crore to be completed by March 31. IDRCL will manage the stressed assets and engage market professionals and turnaround experts. Finance Minister Nirmala Sitharaman in her Budget 2021-22 speech had announced that the government intends to set up a bad bank as part of the resolution of bad loans worth about Rs 2 lakh crore in the banking system. Shares of Axis Bank were trading 0.33 per cent lower at Rs 733.85 apiece during the afternoon trade on the BSE on Tuesday, while HDFC Bank shares were quoting at Rs 1,444.35 apiece, up 0.80 per cent.
Also Read: Bank of Baroda buys 99,000 shares of India Debt Resolution Co at Rs 10/share
Private sector lenders Axis Bank and HDFC Bank on Tuesday said they have signed agreements to acquire up to 15 per cent stake each in India Debt Resolution Company Limited (IDRCL) for a total cash consideration of Rs 7.5 crore each. In September last year, public sector banks had created IDRCL as a step-down asset management company. It has been incorporated with the objective to carry on the business as a debt management company and to do all kinds of debt management, operational management and consultancy services in relation to debt resolution for an asset reconstruction company or investment trust or any other portfolio of securities. In separate exchange filings, Axis Bank and HDFC Bank said that the first tranche of equity investment of Rs 3 crore is expected to be completed by March 31, 2022. Subsequent tranches of equity investment will be made as and when determined by the board of directors of IDRCL, they added. Also Read: Emami's Dermicool acquisition may boost its revenue to Rs 4,000 cr by FY24
Both the lenders said they have received approval from the Reserve Bank of India and Department of Economic Affairs, Ministry of Finance for the investment. On Monday, ICICI Bank also informed the exchanges it would invest Rs 7.5 crore to acquire up to 15 per cent stake in the company and that it expects the investment of first tranche of Rs 3 crore to be completed by March 31. IDRCL will manage the stressed assets and engage market professionals and turnaround experts. Finance Minister Nirmala Sitharaman in her Budget 2021-22 speech had announced that the government intends to set up a bad bank as part of the resolution of bad loans worth about Rs 2 lakh crore in the banking system. Shares of Axis Bank were trading 0.33 per cent lower at Rs 733.85 apiece during the afternoon trade on the BSE on Tuesday, while HDFC Bank shares were quoting at Rs 1,444.35 apiece, up 0.80 per cent.
Also Read: Bank of Baroda buys 99,000 shares of India Debt Resolution Co at Rs 10/share