Utkarsh Small Finance Bank Limited has informed the Exchange about General Updates, as per the attachment
UTKARSHBNK · price
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Utkarsh Small Finance Bank has completed the sale of its portfolio of unsecured stressed microfinance loans (NPAs and written-off accounts) to two Asset Reconstruction Companies following a Swiss Challenge Method process. Pool 1 of ~2.92 lakh accounts with ₹1,016.24 crore in principal outstanding was sold to ARCIL for ₹133.10 crore. Pool 2 of ~1.37 lakh accounts with ₹474.75 crore principal outstanding was sold to Shriram Asset Reconstruction for ₹62.19 crore. In total, about 4.29 lakh stressed MFI accounts with roughly ₹1,491 crore in principal were offloaded for about ₹195 crore.
This is a routine NPA cleanup exercise for the bank, which should help clean up its balance sheet, reduce provisioning burden, and improve asset quality metrics. Recovery at roughly 13% of principal outstanding is in line with typical ARC transactions for stressed unsecured retail loans and is unlikely to materially move the stock.