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PNB to Divest Entire Stake in ISARC for ₹34 Crore.

Economy Business | Dated: 25 May 2025

In May 2025, Punjab National Bank (PNB), headquartered in New Delhi, entered into an agreement to divest its entire 20.90% stake in the Indian Small Medium Enterprise Asset Reconstruction Company (ISARC), based in Mumbai, Maharashtra.

🎯 Key Highlights:

  • - The stake is being sold to Mumbai-based Authum Infrastructure and Investment Limited (AIIL) for a total consideration of ₹34.04 crore.
  • - The transaction involves the transfer of 2.09 crore shares at a price of ₹16.29 per share and is expected to be finalized by the end of the first quarter of the financial year 2025–26 (Q1 FY26).
  • - This strategic move aligns with the Reserve Bank of India’s (RBI) revised guidelines, which stipulate that banks may sponsor only one Asset Reconstruction Company (ARC) at any given time and must limit their investment in other ARCs to less than 10% of the ARC’s paid-up capital.

💡 Other Important Facts:

  • (i) Following this transaction, AIIL will hold 79.28% of ISARC’s equity, while the remaining 20.72% will be retained by other public sector banks (PSBs) and financial institutions.
  • (ii) ISARC was initially established with the support of several prominent institutions, including the Small Industries Development Bank of India (SIDBI) headquartered in Lucknow, Bank of Baroda (BOB) based in Vadodara, PNB in New Delhi, and SIDBI Venture Capital Limited (SVCL), a wholly-owned subsidiary of SIDBI located in Mumbai.
  • (iii) Notably, ISARC holds the distinction of being the first ARC backed by a consortium of public sector banks and government undertakings, with a core mission to revive distressed assets in India’s SME sector.

📚 Test Your Knowledge:

Which bank has Recently signed an agreement to sell its entire stake in ISARC?

Correct Answer: Punjab National Bank

🚀 Quick Recap:

About PNB

  • CEO: Ashok Chandra
  • Headquarters: New Delhi