ARCIL files for IPO, eyes public listing as India’s oldest asset reconstruction firm

Asset Reconstruction Company (India) Limited (ARCIL), the first asset reconstruction company to be incorporated in India, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering.

The IPO will be an offer for sale of up to 10.54 crore equity shares of face value Rs 10 each. The offer includes up to 6.87 crore shares by Avenue India Resurgence Pte. Ltd, up to 1.94 crore shares by State Bank of India, up to 1.62 crore shares by Lathe Investment Pte. Ltd, and up to 10.35 lakh shares by The Federal Bank, the company said in a press release dated August 2.

Established in 2002, ARCIL describes itself as a pioneer in India’s asset reconstruction industry and was the first ARC to be incorporated in the country. As of March 31, 2024, it was the second largest in terms of assets under management at Rs 15,230.031 crore and had the second highest net worth among private ARCs in India at Rs 2,462.511 crore.ARCIL operates across three verticals, corporate loans, SME and other loans, and retail loans, and classifies stressed assets based on internally assessed resolution mechanisms. It derives revenue from management fees, portfolio recovery fees, investment income, and write-backs.

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The company is sponsored by Avenue India Resurgence Pte. Ltd and the State Bank of India, under the SARFAESI Act. Its management team includes CEO and MD Mr. Pallav Mohapatra, President Mr. Phanindranath Kakarla, and CFO Mr. Pramod Gupta.

According to a CRISIL report cited in the DRHP, “the stressed assets opportunity is shifting from corporate to non-corporate loans,” with the retail segment in particular “experiencing rising stress levels.” ARCIL has increased the proportion of retail loans in its portfolio, with retail AUM rising from Rs 1,559.107 crore as of March 2023 to Rs 2,747.88 crore as of March 2025, a compound annual growth rate of 20.79%.As of March 31, 2025, the company had acquired Rs 72,657.307 crore in total principal debt at a cost of Rs 38,155.632 crore and made recoveries of Rs 28,459.7 crore. During FY25, FY24, and FY23, the company acquired Rs 3,975.871 crore, Rs 2,068.982 crore, and Rs 4,288.962 crore of stressed assets, respectively.

ARCIL reported revenue from operations of Rs 596.423 crore and total income of Rs 623.399 crore for the year ended March 31, 2025. Profit after tax stood at Rs 355.319 crore, with a PAT margin of 57%.

For FY24, ARCIL had the lowest expenses as a percentage of average total AUM at 0.57% among the top seven ARCs, and the highest return on assets at 11.48%. Its capital adequacy ratio stood at 99.03%, approximately 40% higher than the next highest private ARC, while the debt-to-equity ratio was the lowest among the top six private ARCs at 0.06.

As of March 31, 2025, the company had formed 652 trusts, of which 453 remained open and 199 had been closed. ARCIL collaborates with 201 registered valuers, 163 collection agents, and 950 empanelled lawyers, and maintains relationships with 30 private sector banks, 28 public sector banks, 2 co-operative banks, 41 non-banking financial companies, 17 housing finance companies, and seven other institutions.

IIFL Capital Services, IDBI Capital Markets & Securities, and JM Financial are acting as the bankers to the issue.

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