India's first asset reconstruction firm files IPO papers with SEBI
What's the story
Asset Reconstruction Company (India) Limited (ARCIL), the first-ever asset reconstruction company (ARC) in India, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The move is part of its plan to raise funds through an initial public offering (IPO). The IPO will include an offer for sale of up to 10.5 crore equity shares with a face value of ₹10 each.
Share sale
Major shareholders selling stakes in the IPO
The IPO will see the promoter selling shareholders and investor selling shareholders offload their stakes. Avenue India Resurgence will sell up to 6.8 crore shares, State Bank of India (SBI) will offload 1.9 crore equity shares, Lathe Investment Pte Ltd will sell 1.6 crore shares, and The Federal Bank will offer 10.3 lakh shares for sale under the OFS.
Business operations
ARC's market position and financial performance
Founded in 2002, ARC has established itself as a leader in acquiring stressed assets from banks and financial institutions. The company was India's second-most profitable ARC in FY2024 with a standalone profit of ₹305.3 crore. It also ranked second among ARCs in India with ₹15,230 crore AUM as of March 31, 2024. The company operates across three business verticals - corporate loans, SME and other loans, and retail loans.
Financial metrics
Recovery from stressed assets
As of March 31, 2025, ARC had acquired ₹72,657.3 crore in total principal debt at a cost of ₹38,155.6 crore or 52.51% of the total principal debt. The company has made recoveries worth ₹28,459.7 crore during this period. These numbers highlight ARC's efficiency in handling stressed assets and recovering dues from them effectively over time.
Financial stability
Strong financial metrics in FY24
In FY24, ARC was the second-largest private ARC in India by revenue from operations (excluding unrealized fair value changes) at ₹570.141 crore. The company had the highest profit after tax as a percentage of average AUM at 1.94% and a capital adequacy ratio of 99.03%. It also recorded the lowest expenses as a percentage of average total AUM among the top seven ARCs at 0.57%, highlighting its strong financial position in the market.