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).
- 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