HDFC mandates A&M to sell realty loans of up to Rs 1,000 crore

The mortgage lender has appointed consulting firm Alvarez & Marsal to scout for buyers for the loan, they said.

“The two loans are not non-performing accounts as yet but cannot be moved to the bank because of stricter banking norms and hence the lender has decided to sell it,” one of them said.

Spokespersons of both HDFC and A&M did not respond to the request for comments till press time Sunday.

The sale will happen in two tranches. The first auction will be held on Tuesday and the second will be in the last week of March, both sources said.

HDFC may decide to sell a large pool of over ₹1.500 crore of loans, depending upon the response it gets from buyers in this round, a third source said.

HDFC reported gross NPAs of 1.23% in the third quarter of FY23. Last year in June, HDFC sold four corporate accounts to Assets Care and Reconstruction Enterprise (ACRE) for ₹270 crore against the total loan of ₹577 crore, resulting in a recovery of 47%, as reported. In October, ACRE again bought a ₹1,180-crore loan from HDFC for ₹602 crore, resulting in a 51% recovery for the mortgage lender, as reported.The merger of HDFC and HDFC Bank was announced in April 2022 and is expected to be completed by July this year. HDFC has obtained clearances from various regulators over the last few quarters. Most recently, the National Company Law Tribunal gave in-principle approval. Currently, HDFC Bank is the second-largest lender in the country, with advances of ₹15.2 lakh crore and HDFC is the largest housing finance company in India with gross loans of ₹7 lakh crore as of December 31, 2022. The merged entity will have total advances of over ₹22 lakh crore based on December 31, 2022, numbers and a net worth of over ₹3 lakh crore, according to a report by CareEdge Ratings.