Third largest private sector lender – Axis Bank today announced, that the bank has signed an agreement to acquire shares of Asset Care and Reconstruction Enterprise (ACRE) from IFCI for Rs 22.72 crore.

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“This is to inform you that the bank has signed a share purchase agreement with IFCI Limited (IFCI) for acquisition of 73,28,334 equity shares -which is almost 13.67% at face value of Rs 10 per share in ACRE from IFCI at Rs 31 per share – total cash consideration of Rs 22.72 crore.” Axis Bank said in a statement.

In the financial year 2016, ACRE had total assets of Rs 336 crore with total income of Rs 35.9 crore. 

Presently, the insurance-giant Life Insurance Corporation of India (LIC), also a promoter of Axis Bank holds around 2.8% shares in ACRE.

The above transaction is subject requisite regulatory approvals, including from the Reserve Bank of India (RBI).

Assets Care and Reconstruction Enterprise (ACRE) Ltd, is an Asset Reconstruction Company, promoted by IFCI alongwith other banks and financial institutions. It is licensed by RBI under the SARFAESI Act with the objective of acquiring non-performing loans (NPLs) from Financial Institutions and banks in India. It started operations in July 2007.

A handful of domestic lenders including Punjab National Bank, which holds 15.3 percent, are also shareholders in the ARCE. Post the transaction, Axis Bank will become the third largest shareholder in the ARC, a Bloomberg report.