State Bank of India (SBI), the country's largest public sector bank, is set to offload a significant stressed loan exposure of ₹1,556 crore related to Regen Power Private Ltd (RPPL), a South India-based wind turbine generator manufacturer. This move forms part of SBI’s broader strategy to maintain asset quality and manage non-performing assets effectively.
SBI has initiated the process to sell its loan exposure to Regen Power through the Swiss auction route. This exposure includes stressed loans worth ₹1,556 crore, with the principal outstanding reported to be ₹580 crore as of March 2025. The intent behind this action is to clear troubled assets from the bank’s books and reinforce balance sheet strength.
The Swiss auction is a competitive price discovery process. In this method, the auctioneer already holds an initial bid and invites counterbids to ensure fair valuation. SBI has adopted this transparent process to maximise recovery from the distressed account and facilitate quicker resolution.
Regen Power, established in December 2006, manufactures wind turbine generators and provides end-to-end solutions, including consulting, supply, installation, and maintenance. The company’s credit profile has deteriorated, with rating agency Icra placing both its long-term and short-term ratings in the “D” category, indicating default.
Icra also reported that Regen Power has been unresponsive to multiple requests for updates on its financials. The non-cooperation has led the rating agency to categorise the entity under "issuer not cooperating".
Regen Power was promoted by Madhusudan Khemka, R Sundaresh and M Mandava Prabhakar Rao, through their holding firm NSL Power Equipment Trading Pvt Ltd. Over the years, it attracted funding from prominent private equity firms such as Indivision India Partners and TVS Shriram Growth Fund, underlining the scale of ambition behind the venture.
Regen entered into a perpetual licence agreement with Vensys Energy AG, allowing it to manufacture and sell wind turbine generators across five countries in South Asia. This partnership was crucial in positioning the company as a notable player in the renewable energy space.
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According to SBI’s annual report for FY25, the bank recovered ₹17,213 crore from cash recovery, upgrades, and technically written-off accounts. The ongoing efforts to minimise risk exposure were supported by favourable macroeconomic trends and recovery in private consumption.
SBI has reported improved asset quality metrics for FY25. Its gross non-performing asset (NPA) ratio declined to 1.82%, marking a 42 basis point year-on-year improvement. The net NPA ratio stood at 0.47%, down by 10 basis points. These metrics reflect the bank’s disciplined credit risk management and focused recovery strategies.
The proposed sale of Regen Power’s loan exposure through the Swiss auction highlights SBI’s commitment to improving asset quality and strengthening financial health. The move also reflects broader trends in the Indian banking sector towards proactive resolution of stressed assets, supported by innovative auction mechanisms and regulatory frameworks.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 10, 2025, 4:24 PM IST
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