Public sector lender Punjab National Bank (PNB) has put its loans to Ramsarup Industries’ unit — Ramsarup Nirmaan Wires — up for sale to asset reconstruction companies (ARCs), sources told FE, adding that the bank’s exposure is around Rs 400 crore.
In Q2 FY16, the Kolkata-based company posted a net loss of Rs 11.3 crore on the back of nil revenues and a Rs 3 lakh interest outgo. In FY15, it reported a net loss of Rs 180 crore on revenues of Rs 4.4 crore and a gross debt of Rs 2,010 crore, according to Capitaline data.
The company is promoted by Imtihan Commercial (15.52%), Madhumalati Merchandise (8.71%), Naresh Engineers (4.85%) and Ashish Jhunjhunwala (4.31%).
Incorporated in 1979, the company manufactures wires, TMT bars and steel. Its head office is in Kolkata and has plants in Kalyani, Durgapur, Shyamnagar and Kharagpur. In 2012, a consortium of 19 lenders, led by Punjab National Bank, declined to restructure loans of the company unless there was a change in management. Other lenders include Indian Overseas Bank, Vijaya Bank, State Bank of India, Canara Bank, Axis Bank, IDBI Bank and ICICI Bank.
In August this year, market regulator Sebi had barred Aashish Jhunjhunwala, chairman and managing director, Ramsarup Industries, from the capital markets for three years after finding him guilty of violating insider trading regulations.
According to reports, the company’s problems began during the financial crisis in 2008 owing to cancellation of large orders.
Meanwhile, lenders could sell non-performing assets (NPAs) worth Rs 20,000 crore to asset reconstruction companies (ARCs) in FY15 out of more than Rs 90,000 crore of assets put on sale. In FY14, banks had offered assets worth Rs 40,000 crore and ARCs bought loans amounting to Rs 22,000 crore.
Last year, the Reserve Bank of India had asked asset reconstruction companies (ARCs) to increase the mandatory upfront investment in security receipts (SRs) to 15% from the earlier 5% in order to ensure ARCs have ‘more skin in the game’.