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Bank of Maharashtra to divest 4% Stake in ISARC

Bank of Maharashtra announced that it will sell its entire 4% ownership in India SME Asset Reconstruction Company for almost Rs 4 crore. According to a regulatory statement, the Bank of Maharashtra (BoM) has entered a share purchase agreement for the sale of the entire equity position of 4% in India SME Asset Reconstruction Company Ltd (ISARC).

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Key Points:

  • The bank’s 4% stake, which translates to 40,00,000 equity shares, would be sold for Rs 9.80 per share for Rs 3.92 crore in cash.
  • The sale of ISARC’s interest is subject to RBI approval for a change in ISARC’s sponsor shareholder. By the end of December 2022, the transaction should be closed.
  • ISARC’s overall revenue for the fiscal year ended March 2021 was Rs 11.09 crore, with a net profit of Rs 0.36 crore.
  • In FY20, it lost Rs 8.39 crore, and in FY19, it lost Rs 9.21 crore.
  • ISARC is the country’s first Asset Reconstruction Company (ARC), with a large number of public sector banks and undertakings supporting it. It focuses on MSME NPA resolution.
  • SIDBI, Bank of Baroda, Punjab National Bank, and SIDBI Venture Capital Ltd are among the sponsors of the ARC.
  • On the BSE, the stock of BoM finished at Rs 18.80 per share, up 0.27 percent from its previous closing of Rs 18.75.

Important Takeaways for exam:

  • ISARC: India SME Asset Reconstruction Company

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