<article><a style="color: #000080;" href="http://www.srei.com">Srei Alternative Investment Managers Ltd (SAIML)</a> will start a Rs.2,000 crore fund to invest in debt instruments of stressed companies which show the promise of a turnaround.
“India Vision Fund will primarily concentrate on those companies, which can be revived through proper nursing,” SAIML said in a statement on Tuesday.</article>

<a style="color: #000080;" href="http://www.srei.com">Srei Alternative Investment Managers Ltd (SAIML)</a> will start a Rs.2,000 crore fund to invest in debt instruments of stressed companies which show the promise of a turnaround.
“India Vision Fund will primarily concentrate on those companies, which can be revived through proper nursing,” SAIML said in a statement on Tuesday.
The fund will purchase assets or loans and invest by way of debt and other instruments that will be taken over from firms, banks, non-banking finance companies or even asset reconstruction companies (ARCs).
“There is a large supply of stressed assets which banks are trying to sell. If there are more people interested in acquiring those assets with the intention of turning them around for a reasonable return on their investment, it is a win-win situation for everyone,” said Nikhil Shah, managing director, Alvarez and Marsal Holdings Llc in India.
SAIML, a venture of the Kolkata-based Srei Group, has already initiated talks with companies and their lenders and is specifically looking at cases where a turnaround is possible, the statement said.
“We feel that good assets have been created in the country, and it is a shame if these assets are allowed to languish due to absence of proper assistance. The opportunities in this area are huge,”said Nalin Kumar, chief investment officer, SAIML, in the statement. “We have approached many investors, both domestic and international, and they have expressed keen interest to invest. Some of them are at advanced stage of investment,” said Kumar
The stressed asset space has become a hotbed for investments from large domestic and international investors, as banks look to de-leverage their loan books and manage their declining asset quality. This process is likely to throw up opportunities for those willing to put in the capital and management bandwidth required to turn these stressed assets around.
“We are going to work with the present management in these stressed firms most of the time, but are also open to working with external experts and former professionals to ensure that the desired change is achieved,” said Kumar in a phone interview. “As an industry average, investments in debt instruments fetch returns at about 15%, but equity investments bring in more than 25% returns. However, our returns will also depend on the time it takes to turn around an asset and will thus vary in each case.”
On 20 January 2016, Mint had reported that the Ajay Piramal-led <a style="color: #000080;" href="http://www.piramal.com">Piramal Group</a> will be floating a $1 billion stressed-asset fund in association with Nirmal Gangwal, founder of turnaround firm, Brescon Corporate Advisors Pvt. Ltd.
In January, Mint reported that global funds, specializing in bad assets, such as the Los Angeles-based Oaktree Capital Management Lp that has more than $100 billion in assets under management, are looking at re-entering the Indian market. These funds have started to look at India for investment opportunities as banks and corporate houses try to pare debt with offers of equity and asset sales.
KKR and Co. has a special situations fund in India. During his India visit in February 2014, <a style="color: #000080;" href="http://www.kkr.com/">KKR </a>co-founder Henry Kravis had said that the firm could consider acquiring a pool of non-performing assets from Indian banks.
Other funds, such as the Hong Kong-based <a style="color: #000080;" href="http://www.ssgasia.com/">SSG Capital Management Ltd</a> have also become more active in India.
Earlier this month, SSG Capital Management bought Amtek Auto Ltd’s bonds, which were in default, from JP Morgan Asset Management Inc. Last year, the vulture fund also acquired a 49% stake in securitization and asset reconstruction firm Assets Care and Reconstruction Enterprise Ltd for an undisclosed amount.
Apollo Global Management, a global fund active in the stressed asset space, is already present in India through a joint venture with ICICI Venture, called AION Capital Partners.
Gross non-performing assets (NPAs) of 39 listed banks surged to Rs.4.38 trillion for the quarter ended 31 December 2015, from Rs.3.4 trillion at the end of the September quarter, according to data collated by corporate database provider <a style="color: #000080;" href="https://www.capitaline.com/">Capitaline</a>.
As on 30 September, stressed loans—sum of gross NPAs and restructured loans—stood at 11.3% of total advances, according to the December edition of the Financial Stability Report released by the Reserve Bank of India (RBI).
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India: Srei to start $291m fund to invest in debt instruments of stressed firms

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