Avenue Capital hikes stake in Mumbai-based ARC
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US-based Avenue Capital has acquired additional stake in Asset Reconstruction Company (India) Ltd (Arcil) from public sector lender IDBI Bank, according to a public disclosure.  

This would take Avenue Capital’s total shareholding up to around 45% in Arcil, the country’s oldest and third largest ARC by size.  

IDBI Bank on Wednesday said it has divested its entire stake of over 19% in ARCIL to Avenue India Resurgence Pte, part of Avenue Capital India. The government lender, however, did not disclose the deal value.  

"IDBI Bank has sold its entire holding of 6,23,23,800 fully paid-up equity shares constituting 19.18 per cent of the total equity share capital of Asset Reconstruction Company (India) Ltd. (Arcil) on May 18, 2022 to Avenue India Resurgence Pte. Ltd," IDBI Bank said in a regulatory filing.

With this, the LIC-controlled lender said it ceases to be a sponsor shareholder of Arcil.  

Last year, the lender had invited bids to divest its shareholding in Arcil as part of its non-core asset sale.  

Incorporated in 2002, Arcil has assets under management (AUM) of around Rs 14,000 crore as of March end 2021. This is around one third of its larger rival Edelweiss ARC.  

Arcil, which purchases bad loans from banks and non-bank lenders, is sponsored by large Indian banks such as State Bank of India (19.95%), IDBI Bank (19.18%) and Punjab National Bank (10.01%). ICICI Bank and its subsidiary ICICI Home Finance together own 15.52% of Arcil. 

New York-based distressed investor Avenue Capital acquired around 27% shareholding in the ARC in November 2018.  

Avenue Capital India was formed in 2005 to make investments in Indian companies. The firm focuses on restructuring a company or a particular sector and also looks at distressed and undervalued credit-related securities, bank loans, trade claims and private investments. It focused on distressed debt besides having expertise in aircraft leasing. 

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