MUMBAI — JM Financial Asset Reconstruction Company has been selected as the winning bidder for Distribution Logistics Infrastructure's ₹971 crore stressed debt, submitting an offer of ₹621 crore to the lender consortium.
The transaction ensures a 64% recovery rate for creditors led by Bank of Baroda, marking a relatively healthy resolution outcome in India's asset reconstruction landscape where recovery rates frequently fall below 50%.
The debt sale process moved to competitive bidding after negotiations with DLI's promoters for a settlement arrangement failed to yield results. Financial sector sources indicate the final closure may require additional time as documentation and regulatory approvals are completed.
Asset reconstruction companies have witnessed increased deal flow as banks accelerate efforts to clean legacy stressed assets from their books. The Reserve Bank of India's stricter provisioning norms have pushed lenders toward faster resolution mechanisms, making ARC-led acquisitions an attractive exit route.
For Bank of Baroda and other lenders in the consortium, the recovery ratio significantly exceeds the provisioning typically made for sub-standard and doubtful assets, potentially providing writebacks that could improve quarterly profitability metrics. The transaction size places it among medium-sized debt resolutions concluded in the current financial year.