IndoStar Capital Finance has completed another strategic divestment of its stressed commercial vehicle loan portfolio to Phoenix ARC Private Limited. The NBFC announced the transaction through a regulatory filing, marking continued efforts to reduce its stressed asset burden and improve portfolio quality.

Latest Transaction Details

The company has sold commercial vehicle loans with outstanding dues of ₹135.73 crores to Phoenix ARC Private Limited. The transaction was completed on December 29, 2025, with Phoenix ARC paying a consideration of up to ₹108.55 crores.

Regulatory Framework

IndoStar Capital Finance executed this transaction in full compliance with regulatory requirements. The company informed stock exchanges through a filing under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The accounts were resolved following the Master Directions – Reserve Bank of India (Transfer of Loan Exposures) Directions 2021, as amended.

Strategic Portfolio Management

This latest divestment represents IndoStar's ongoing strategy to clean up its balance sheet and reduce stressed assets. The 80.00% recovery rate on the outstanding dues demonstrates effective asset resolution in the current market environment. The transaction allows the company to:

• Further reduce stressed asset exposure
• Improve overall loan book quality
• Free up capital for deployment in performing assets
• Strengthen financial position through portfolio optimization

Market Implications

The successful completion of this asset sale reflects IndoStar Capital Finance's proactive approach to managing its commercial vehicle finance portfolio. Such strategic moves are typically viewed favorably by investors as they demonstrate management's commitment to maintaining asset quality and financial discipline in the competitive NBFC sector.

IndoStar Capital Finance Limited has taken a significant step in its retailisation strategy by selling a substantial portion of its legacy corporate loan book to Phoenix ARC Private Limited. The transaction, which was completed on August 25, 2023, involved Stage 2 accounts with outstanding dues amounting to Rs 915.00 crore.

Transaction Details

The sale was executed through an ARC (Asset Reconstruction Company) sale under the Swiss Challenge method, with the accounts being resolved at carrying value. This move aligns with IndoStar's strategic shift towards retail lending and away from corporate loans.

Regulatory Compliance

The transaction was carried out in accordance with the RBI Transfer of Loan Exposures Directions 2021, ensuring adherence to regulatory guidelines for such sales. This compliance underscores IndoStar's commitment to following proper procedures in its portfolio management activities.

Strategic Implications

This sale marks a pivotal moment in IndoStar Capital Finance's ongoing transformation:

• Retailisation Focus: By divesting a significant portion of its corporate loan book, IndoStar is reinforcing its strategy to focus more on retail lending.
• Balance Sheet Management: The move is likely aimed at improving the company's asset quality and reducing exposure to potentially stressed corporate assets.
• Risk Mitigation: Transferring Stage 2 accounts to an ARC could help IndoStar in managing its risk profile more effectively.

Market Impact

The transaction represents a substantial shift in IndoStar's loan portfolio composition. Investors and market analysts will likely be watching closely to assess the impact of this move on the company's financial health and future growth prospects.

As IndoStar Capital Finance continues to execute its retailisation strategy, this transaction stands out as a significant milestone in its journey towards reshaping its business model and loan book structure.