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MUMBAI: The stressed asset space is losing its allure for international players. Arcion Revitalization, originally promoted by Apollo Global and ICICI Bank, has become the latest firm to relinquish its license for an asset reconstruction company (ARC). In January of this year, Lonestar had surrendered its ARC license. In 2020, amid the pandemic, KKR had abandoned its ‘firm’ intentions to establish an ARC.
“In emerging economies, foreign capital has played a key role in cleansing the non-performing loans market and releasing blocked domestic capital. Probably, there is a need for a more liberalised environment to facilitate ease of doing business in the stressed asset market,” said Hari Hara Mishra, CEO of the Association of ARCs in India.
Bankers say there are various reasons for the flight of foreign investors. The increase in the capital requirement for these companies – from Rs 2 crore in 2016 to Rs 100 crore, which was to be achieved by 2019 – is a major factor. Last year, the capital requirement was raised to Rs 300 crore by April 2026.
The second reason is the government’s decision to establish the National Asset Reconstruction Company (NARCL), which enjoys government backing and guarantees. Private players found it challenging to compete for assets with NARCL given the government’s support. Around 29 companies were granted a licence by RBI. Of this, the active foreign players are JC Flowers and ACRE.
RBI announced that Arcion had surrendered its certificate of registration, marking its exit from the asset reconstruction business. The certificate has been cancelled as of August 28. Apollo Global, KKR and Lonestar continue to be major players in the bad loan business globally.
International funds are also crucial players in the bad loans business because they have deep pockets.
“In emerging economies, foreign capital has played a key role in cleansing the non-performing loans market and releasing blocked domestic capital. Probably, there is a need for a more liberalised environment to facilitate ease of doing business in the stressed asset market,” said Hari Hara Mishra, CEO of the Association of ARCs in India.
Bankers say there are various reasons for the flight of foreign investors. The increase in the capital requirement for these companies – from Rs 2 crore in 2016 to Rs 100 crore, which was to be achieved by 2019 – is a major factor. Last year, the capital requirement was raised to Rs 300 crore by April 2026.
The second reason is the government’s decision to establish the National Asset Reconstruction Company (NARCL), which enjoys government backing and guarantees. Private players found it challenging to compete for assets with NARCL given the government’s support. Around 29 companies were granted a licence by RBI. Of this, the active foreign players are JC Flowers and ACRE.
RBI announced that Arcion had surrendered its certificate of registration, marking its exit from the asset reconstruction business. The certificate has been cancelled as of August 28. Apollo Global, KKR and Lonestar continue to be major players in the bad loan business globally.
International funds are also crucial players in the bad loans business because they have deep pockets.
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