SBI, Bank of Baroda and Union Bank subscribe to shares of IDRCL

Public sector banks SBI, Bank of Baroda and Union Bank on Friday said they have subscribed to 99,000 shares each of the yet to be operational asset reconstruction company IDRCL.

In a regulatory filing, country's largest lender State Bank of India (SBI) said it has acquired 99,000 shares of India Debt Resolution Company Ltd (IDRCL), equivalent to 12.3 per cent stake.

It added that the holding will be brought down to 5 per cent by March 31, 2022.

"Bank of Baroda has subscribed to 99,000 shares of India Debt Resolution Company Ltd (IDRCL)," the bank said in a separate regulatory filing.

The acquisition is subject to execution of investment agreement, it said.

The lender further said its equity stake of 12.30 per cent in IDRCL will be reduced to 9.90 per cent by March 31, 2022. The shares are to be subscribed at Rs 10 apiece.

Likewise, Union Bank of India (UBI) said it has subscribed to 99,000 equity shares of face value of Rs 10 each in IDRCL towards the bank's initial subscription in the asset reconstruction company.

UBI said it will bring down the holding to 10 per cent in due course of time on subscription by other PSBs/FIs.

IDRCL is yet to become operational. As an asset management company, it will manage the asset and engage market professionals and turnaround experts for debt resolution.

Public sector banks (PSBs) and public financial institutions (FIs) will hold a maximum of 49 per cent stake in IDRCL and the rest will be with private sector banks.