Indian Bank-Led Lenders Invite Bids to Offload ₹738 Crore BLA Power Loans

Indian Bank-led lenders have launched a Swiss challenge auction to sell stressed loans of BLA Power Pvt. Ltd. The move aims to recover dues from a non-performing thermal power project. It reflects efforts to clean up bad assets. 

Overview of the Stressed Asset Sale 

As per news reports, a lender consortium led by Indian Bank has initiated a Swiss challenge auction to divest non-performing loans of BLA Power Pvt. Ltd., aiming to recover part of its exposure from the stressed thermal power project. The auction process is being managed with professional advisory support and is scheduled to conclude in early March. 

The consortium has put up ₹738.18 crore worth of stressed loans for sale under the Swiss challenge method. The auction is scheduled for March 9, with BOB Capital Markets acting as the process advisor. The anchor bid received is ₹285 crore, which implies a recovery of nearly 39% for the lenders.  

Eligible bidders include banks, all-India financial institutions such as Nabard, NHB, EXIM Bank, Sidbi and Nabfid, small finance banks, non-banking financial companies (including housing finance companies), and asset reconstruction companies (ARCs). 

Structure of the Anchor Bid and Bidding Conditions 

The anchor bid of ₹285 crore is structured on a 15:85 cash-to-security receipts (SRs) basis. If the anchor bidder wins, 15% of the consideration will be paid upfront in cash, while the remaining 85% will be settled through the issuance of security receipts. 

In addition, the bidder has estimated a further recovery of around ₹140 crore for lenders upon the redemption of the SRs. This structure allows lenders to receive partial immediate liquidity while retaining upside potential linked to future recoveries from the stressed asset. 

BLA Power Pvt. Ltd., incorporated in 2006, established a 90-MW coal-based thermal power project at Gadarwara in Madhya Pradesh, developed in 2 phases of 45 MW each. The project’s financial stress has led to its loans being classified as non-performing, prompting lenders to seek recovery through the auction route. 

Read More: Indian Bank Shares in Focus: Gross Advances Saw Double-Digit Growth in Q3FY26! 

Indian Bank Share Price Performance  

As of February 20, 2026, at 1:05 PM, Indian Bank share price is trading at ₹943.45 per share, reflecting a surge of 1.74% from the previous closing price. Over the past month, the stock has surged by 11.44%  

Conclusion  

The Swiss challenge auction reflects lenders’ efforts to accelerate recovery from stressed power assets. With a structured anchor bid and strict cash-only counter-bid norms, the process aims to attract serious bidders and maximise upfront realisations, while security receipts offer potential upside through future recoveries. 

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