Context:
State Bank of India (SBI) is selling its ₹1,556 crore stressed loan exposure to Regen Powertech Private Ltd (RPPL), a South India-based wind turbine manufacturer, as part of efforts to clean up its balance sheet.
Key Details of the Sale
- Outstanding Principal: ₹580 crore (as of March 2025).
- Auction Method: Swiss Challenge (SBI already has an initial bid and is inviting counter-bids for price discovery).
Why Is SBI Selling?
- Bad Debt Cleanup: SBI has been actively reducing NPAs (Gross NPA improved to 1.82% in FY25 from 2.24% YoY).
- Recovery Efforts: In FY25, SBI recovered ₹17,213 crore through upgrades, cash recoveries, and write-offs.
SBI’s Broader NPA Strategy
- Stronger Asset Quality: Economic recovery and risk containment helped reduce NPAs.
- Aggressive Recovery: Using auctions, settlements, and write-offs to improve financial health.
This sale is part of SBI’s ongoing efforts to strengthen its balance sheet and focus on profitable lending.
Source: Business Standard
