Mumbai: Banks are selling bad loans in micro, small and medium enterprises (MSMEs), with Indian Overseas Bank (IOB) deciding to sell loans in the segment comprising 41 accounts worth ₹208 crore. The bank is looking to recover 60% of the debt. It has invited potential buyers to submit offers, with 20% in cash and 80% in security receipts (SR).
The last date for submitting expressions of interest is February 9 and e-bidding will take place on February 21.
Bidders are expected to offer 5% mark-up on 20% cash and 80% SR base bid, with preference to bids with a higher cash portion.
The cash component is ₹26.40, while the SR portion is ₹105.60 and the total recovery expectation is ₹125 crore, which is 60% of the outstanding book value.
The initial amount for a counter bid is set at ₹132.00 crore, a 5.34% mark-up from the binding bid amount of ₹125.3 crore. This is on a basis of 20% cash and 80% SR.
