Acquisitions of NPAs from Bank/ FIs are currently either through an auction process or through bilateral negotiations. Section 7(1) and 7(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act) gives right to the Asset Reconstruction Companies (ARCs) to issue Security Receipts (SRs) to raise resources from Qualified Institutional Buyers (QIBs) and to issue SRs as consideration for acquisition of financial assets from banks and financial institutions. RBI has also granted permission to Foreign Institutional Investors (FIIs) registered with Securities and Exchange Board of India (SEBI) to invest in SRs issued by ARCs registered with RBI.
IARC acquires single assets as well as portfolios in its Own/ Trust books through participation in auctions, and bilateral deals largely with mid – to – large size banks. IARC adopts best practices in terms of analysis, valuation and transaction closures in a time bound process driven manner, as below:
