Aditya Birla Capital Ltd, the holding company of the group’s financial services interests, is expected to foray into asset reconstruction business, a financial daily reported.
In September 2017, Aditya Birla ARC Ltd had received an in-principal approval from the Reserve Bank of India to set up the company.
Ajay Srinivasan, chief executive officer of Aditya Birla Capital, told Mint that the company will infuse regulatory capital in Aditya Birla ARC and start the business, besides being open to partner with foreign stressed asset investors.
Given that stressed assets, or non-performing assets plus restructured loans, stood at Rs 9.46 lakh crore as of September 2017, or 12.2% of the total loans, at least seven foreign funds see an opportunity in investing in stressed assets and specialised corporate credit in India, in partnerships with local financial institutions.
These foreign firms include Canadian pension funds Caisse de Dépôt et Placement du Québec (CDPQ) and Canada Pension Plan Investment Board (CPPIB) as well as alternative investment firms Bain Capital, Oaktree Capital, Brookfield Asset Management and J.C. Flowers & Co.
Srinivasan told Mint that the company would target opportunities at mid-corporate, small and medium enterprises rather than large corporates.
Aditya Birla Capital holds the Aditya Birla Group’s life and health insurance, asset management, private equity, corporate lending, structured finance, broking, wealth management and housing finance businesses. The company was listed in September 2017, following a restructuring exercise at the group level.
As on 31 December 2017, the company’s total assets under management stood at Rs 2.99 lakh crore and the lending book was at Rs 46,522 crore.
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