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ICICI Bank, the country’s largest private sector lender, has decided to sell loans turned sour of about Rs 1,000 crore to asset reconstruction companies (ARCs).
A top executive with an ARC said the bank had put two accounts, of Falcon Tyres and Tulip Telecom, on sale. The lender has an exposure of Rs 700 crore to Tulip and Rs 300 crore to Falcon.
At end-March, the bank’s gross non-performing assets (NPAs) were Rs 15,095 crore or 3.78 per cent of gross advances, compared with Rs 10,505 crore a year ago.
To keep bad loans in check, it has been growing its corporate book with caution. In the January-March quarter, domestic corporate loan growth was 9.8 per cent year-on-year; the retail loan book grew 24.6 per cent. The management had also said it had decided to move towards lending to higher-rated companies.
Tulip, according to rating agency CARE, had loans (short-term and long-term) of Rs 1,300 crore and debentures worth Rs 300 crore. It carried a D-rating, reflecting the continuing delay in servicing of debt obligations. Tulip is an end-to-end data connectivity services provider.
Falcon Tyres was incorporated in 1973 by the Dubai-based MR Chabbria group. In November 2005, it was acquired by the Ruia group, headed by Pawan Kumar Ruia. It makes automotive tyres and tubes for mainly the two-and three-wheeler segments.
