Blackstone mulls setting up asset reconstruction company in India

Global private equity firm Blackstone Group is exploring setting up an asset reconstruction company (ARC) in India to tap the opportunity thrown up by bad loans approaching ₹10 lakh crore, two people aware of the development said. “Blackstone is keen on the stressed assets space in India. They have been assessing the opportunity for some time and now they are looking to set up an ARC to tap into the growing opportunity and are in talks with experts in the field for the same,” said one of the two people cited above, requesting anonymity as the talks are private.

“As a matter of policy, Blackstone does not comment on media/market speculation,” a Blackstone spokesperson said in an email response to a query.

If Blackstone indeed sets up an ARC, it will be the latest among foreign private equity investors who have spotted the opportunity in stressed assets.

In January, Mint reported that AION Capital Management Ltd, a joint venture between ICICI Bank Ltd and Apollo Global Management, has applied for a licence to form an ARC. US-based stressed asset specialist Lone Star Funds too has applied to the RBI to set up an ARC in India, Mint reported in November.

Global PE funds such as KKR and Co, Hong Kong-based SSG Capital Management and International Finance Corp. (IFC), the investment arm of the World Bank, have already acquired stakes in existing ARCs. In January 2015, IFC invested in Encore Asset Reconstruction Co. Pvt. Ltd, while in March 2016, private equity major KKR & Co picked up a stake in International Asset Reconstruction Co Pvt Ltd.