19 hrs ago
ARCIL Eyes Early-Stress Assets Ahead of ECL Implementation
ARCIL helps deal with loans that may not be repaid.
It believes a new accounting system called expected credit loss will help banks spot troubled loans earlier.
This could create more business for ARCIL.
The company already buys some bad loans and other loans showing signs of trouble.
It also wants to collect payments for banks and finance companies.
ARCIL says the total amount of organized lending in India is very large and keeps growing.
Its retail loan business has grown quickly, although it also works with corporate and SME loans.
ARCIL will have an IPO in September, but the money raised will go to existing shareholders rather than into the company.
ARCIL expects early-stage stressed assets to become more important after the expected credit loss framework is implemented.
Managing director and CEO Phanindranath Kakarla said banks are likely to recognize seriously impaired assets faster under ECL.
ARCIL plans to offer collections-as-a-service to banks and NBFCs using its existing collections infrastructure.
The company said systemic credit exceeds Rs 200 lakh crore and is expanding by about Rs 30 lakh crore annually.
ARCIL’s IPO will run from September 9 to September 11 at Rs 132-139 per share and will be entirely an offer for sale.
- Who
- ARCIL and its managing director and CEO, Phanindranath Kakarla.
- What
- ARCIL is targeting early-stage stressed assets and planning a collections-as-a-service business while launching an IPO.
- Where
- The article discusses India's banks, NBFCs and organized credit market.
- When
- The IPO is scheduled for September 9-11; the article does not specify when ECL implementation will begin.
- Why
- ARCIL expects ECL to make banks recognize credit stress earlier, increasing the pool of assets available to asset reconstruction companies.
Key facts
- IPO dates
- September 9 to September 11
- IPO price band
- Rs 132-139 per share
- IPO structure
- Entirely an offer for sale of up to 5,27,31,946 equity shares
- Systemic credit
- More than Rs 200 lakh crore across banks and NBFCs
- Annual credit growth
- About Rs 30 lakh crore
- Retail asset growth
- Around 56% over the last two years
- Face value
- Rs 10 per share
Quotes
Phanindranath Kakarla
Managing director and CEO of ARCIL
“Some sellers do include non-NPA accounts as part of stress accounts and we buy them. We expect them to become fairly important when ECL is implemented, as there will be faster recognition of really bad assets”
financialexpress.com
Sources
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