IDBI Caps invites counter bids on NARCL's base bid for Govindraja Mills

IDBI Capital Markets & Securities on Monday invited counter bids from entities interested in acquiring Rs 755 crore of non-performing assets (NPAs) of a consortium of eight banks led by state-owned Canara Bank in Shri Govindraja Mills Pvt Ltd, through a Swiss challenge auction.

According to sources aware of the development, state-owned National Asset Reconstruction Company (NARCL) has submitted the base bid, based on which the Swiss challenge auction has been called by IDBI Capital Markets. NARCL’s bid is now the anchor bid for the auction.

The consortium of lenders includes Indian Bank, State Bank of India, DBS Bank, Punjab National Bank, Bank of Maharashtra, Karur Vysya Bank, and City Union Bank apart from Canara Bank.

 

Entities interested in acquiring the NPAs—including asset reconstruction companies, banks, non-banking finance companies, and all-India financial institutions—have to submit their expressions of interest (EoIs) for counter bids by September 21, according to an auction notice, which was published in one of the financial newspapers on Monday.

Tamil Nadu-based Shri Govindraja Mills is engaged in the manufacturing of cotton and polyester-blended cotton yarn, such as polyester viscose yarn used for knitting and weaving.

“The lenders shall not assume any operational, legal, or any other type of risks relating to the loan exposure and shall not be providing any representations or warranties for Shri Govindraja Mills,” the auction notice stated.

If IDBI Capital Markets does not receive any counter bids for the asset up for sale, NARCL will be declared the successful bidder. However, if a counter bid exceeding NARCL's anchor bid is received, NARCL will be given the opportunity to match the counter bid; if they do not, the counter bidder will be declared the successful bidder.

NARCL is eyeing stressed debt acquisitions totaling Rs 1.25 trillion, with offers for assets in different stages of acquisition and due diligence in FY25. In the current financial year, NARCL had given an offer of Rs 360 crore to acquire the debt of eleven lenders led by Indian Overseas Bank (IOB) in Delhi-based Agson Global Pvt Ltd. NARCL has been on a debt-acquiring spree since last year. It has acquired around Rs 92,000 crore of stressed debt from 18 accounts until March 31, 2024.

An email sent to NARCL did not elicit a response till press time.