ARCIL to acquire Rs 2,000 cr worth bad loans in FY08

MUMBAI: The sticky assets of Indian banks is proving valuable to the Asset Reconstruction Company India (ARCIL), which has drawn up plans to acquire over Rs 2,000 crore worth of bad loans by March.

The company is readying up to strengthen its dominance in the country's asset reconstruction space and expects a 25 per cent growth in its assets under management (AUM) in the next 1-2 years, Arcil Managing Director and CEO S Khasnobis told media here.

The company's current AUM stands at over Rs 8,000 crore, while the amount it has acquired from banks and other financial institutions, including the overdue interest, is estimated at about Rs 36,000 crore.

"I expect a 22-25 per cent growth in our AUM in the next 1-2 years. With non-performing assets (NPAs) of banks likely to go up in line with industry's inherent growth, asset reconstruction companies have a huge business potential," Khasnobis said.

Arcil has acquired bad loans valued at Rs 1,600 crore so far this fiscal (FY 08) from around four deals, and enjoys a dominating 80 per cent market share in the segment, he said.

Earlier this month, Arcil had reportedly sold a part of its securitised bad loans portfolio garnered from companies in various sectors such as banking, retail, textiles, steel, cement and fertilisers to Deutsche Bank.