HDFC to sell off Rs. 2000 crore stressed developed loans ahead of its merger with HDFC Bank: Reports

Housing Development Finance Corporation (HDFC) is in advanced stage to offload stressed loans worth Rs 2000 crore extended to developers ahead of its merger with HDFC Bank, as per reports by The Economic Times.

The assets of HDFC have been showing an improvement since the last few quarter. It now wants to sell the stressed loans before its merger which will create financial behemoth. Its individual gross NPA (Non-Performing Assets) decreased from 0.99 per cent to 0.75 per cent as of March 31. Its non-individual gross NPA decreased from 4.76 per cent to 2.90 per cent.

These loans are spread across 7 to 8 accounts and reportedly includes advances made to Radisson Blu properties. The mortgage lenders are in negotiations with the asset reconstruction companies to sell these loans. Alvarez & Marsal, a consulting firm, have been actively involved in seeking potential buyer for the loans.

It is to be noted, that as per the reports, not all loans are NPAs. While some are NPA, other loans remain stressed and are not declared as NPAs yet.

Earlier in March, HDFC has showcased some of these accounts for potential sale but did not proceed due to lower-than-expected recovery prospects.