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.