Asset Reconstruction Company IPO

Asset Reconstruction is a prominent Asset Reconstruction Company (ARC) in India, focused on acquiring and resolving stressed financial assets. It purchases non-performing assets (NPAs) from banks and financial institutions, executing resolutions via restructuring, enforcement of securities, and settlements. The company operates through three verticals: corporate loans, SME loans, and other/retail loans. As of March 31, 2025, it manages total assets of Rs 168,525.70 million, with 75.48% corporate, 16.31% retail, and 8.22% SME loans. It is the second-largest ARC by AUM and net worth, with 201 registered valuers, 163 collection agents, 13 offices across 12 states, and 193 personnel.

Asset Reconstruction Company (India) Limited IPO Overview

Asset Reconstruction IPO is a bookbuilding issue of ₹732.97 crore, comprising an offer for sale (OFS) of 5.27 crore equity shares. The IPO will open for subscription on 9 September 2026 and close on 11 September 2026, with allotment expected to be finalised on 15 September 2026. The shares are proposed to be listed on NSE and BSE, with a tentative listing date of 17 September 2026. The IPO has a price band of ₹132 to ₹139 per share and a lot size of 107 shares, with the minimum investment for retail investors set at ₹14,873 based on the upper price band. IIFL Capital Services Ltd. is the book-running lead manager, while MUFG Intime India Pvt. Ltd. is the registrar to the issue.

Asset Reconstruction Company (India)Limited Upcoming IPO Details

Category	Details
Issue Type	Book Built Issue IPO
Total Issue Size	5,27,31,946 shares (aggregating up to ₹733 Cr)
Fresh Issue	NA
Offer for Sale (OFS)	5,27,31,946 shares of ₹10(aggregating up to ₹733 Cr)
IPO Dates	9 September 2026 to 11 September 2026
Price Band	₹132 to ₹139 per share
Lot Size	107 shares
Face Value	₹10 per share
Listing Exchange	BSE, NSE
Shareholding Pre-Issue	32,48,97,140 shares
Shareholding Post-Issue	32,48,97,140 shares

IPO Lots

Application	Lots	Shares	Amount
Retail (Min)	1	107	₹14,873
Retail (Max)	13	1,391	₹1,93,349
S-HNI (Min)	14	1,498	₹2,08,222
S-HNI (Max)	67	7,169	₹9,96,491
B-HNI (Min)	68	7,276	₹10,11,364

Asset Reconstruction Company (India) Limited IPO Reservation

Investor Category	Shares Offered
QIB Shares Offered	Not more than 50% of the Offer
Retail Shares Offered	Not less than 35% of the Offer
NII (HNI) Shares Offered	Not less than 15% of the Offer

Asset Reconstruction Company (India) Limited IPO Valuation Overview

KPI	Value
Earnings Per Share (EPS)	₹12.55
Price/Earnings (P/E) Ratio	To be declared
Return on Net Worth (RoNW)	13.95%
Net Asset Value (NAV)	₹94.78
Return on Equity (RoE)	13.95%
Return on Capital Employed (RoCE)	To be updated
EBITDA Margin	78.21%
PAT Margin	51.95%
Debt to Equity Ratio	0.39

Objectives of the IPO Proceeds

• Being entirely an OFS issue, the IPO proceeds will entirely go to the selling shareholders, and the company will not use the proceeds for corporate purposes.

Asset Reconstruction Company (India) Limited Financials (in crore)

Particulars	31 Mar 2026	31 Mar 2025	31 Mar 2024
Assets	4,460.85	3,263.82	2,795.34
Total Income	785.08	623.40	574.11
Profit After Tax (PAT)	407.84	355.32	305.34
Reserves and Surplus	2,751.18	2,439.19	2,135.20
Total Borrowing	1,205.50	305.93	149.95

Financial Status of Asset Reconstruction Company (India) Limited

Asset Reconstruction Company (India) Limited IPO Strengths

1. Pioneering Market Position with Strong AUM

ARCIL is India’s first ARC, incorporated in 2002, and holds the second-largest AUM (₹152,300.31 million as of March 31, 2024). It ranks among the top ARCs in profitability, net worth, and operational revenue. Its early entry provided deep regulatory expertise, enabling compliance with RBI norms, including the Net Owned Fund requirement, positioning it as a leader in stressed asset resolution.

2. Disciplined Acquisition Strategy & Risk Management

ARCIL follows a structured credit assessment process, leveraging data analytics and proprietary tools for portfolio evaluation. Its diversified acquisitions (₹39,758.71 million in Fiscal 2025) and increasing SR investments (32.23% in Fiscal 2025) reflect a disciplined, risk-aware approach. Strong relationships with banks and financial institutions enhance its ability to source and structure deals efficiently.

3. Robust Resolution & Collections Framework

ARCIL employs multiple resolution strategies, including IBC, settlements, and restructuring, supported by specialized teams for corporate, SME, and retail loans. Its digital collections platform, extensive agent network, and collaborations with third-party agencies ensure high recovery rates. The cumulative SR redemption ratio stood at 51.79% as of March 31, 2025, demonstrating effective asset monetization.

4. Consistent Financial Performance & Strong Balance Sheet

ARCIL maintains strong profitability (PAT of ₹3,053.41 million in Fiscal 2024) and operational efficiency, with high return ratios (11.48% ROA in Fiscal 2024). Its prudent financial management is reflected in a robust net worth (₹27,677.98 million standalone as of March 31, 2025) and low debt-to-equity ratio (0.06), ensuring long-term stability.

5. Experienced Leadership & Marquee Investors

ARCIL’s board and management comprise industry veterans with expertise in banking and stressed assets. Promoters include Avenue Capital Group (69.73%) and State Bank of India (19.95%), providing strategic direction and credibility. The leadership’s deep domain knowledge drives innovation in acquisitions and resolutions, reinforcing ARCIL’s market leadership.

More About Asset Reconstruction Company (India) Limited

Asset Reconstruction Company (India) Limited (ARCIL) is a pioneering asset reconstruction company operating across India. The company specialises in acquiring stressed assets from banks and financial institutions and implementing resolution strategies through restructuring, enforcement of rights on underlying securities, and settlements, aimed at maximising recovery and optimising the value of such assets. Incorporated as India’s first ARC on August 29, 2003, under the SARFAESI Act, ARCIL completed its first acquisition of stressed assets in December 2003 and has operated successfully for over two decades.

1. Financial Performance

As of Fiscal 2024, ARCIL was the second most profitable ARC in India, reporting a standalone profit of ₹3,053.41 million. It also ranked as the second largest ARC in terms of assets under management (AUM) at ₹152,300.31 million and had the second largest net worth among private ARCs at ₹24,625.11 million. Total revenue from operations (excluding unrealised fair value changes) stood at ₹5,701.41 million.

2. Operations and Presence

ARCIL operates through 13 offices across 12 states, employing 193 personnel. The company collaborates with 201 registered valuers, 163 collection agents, and 950 empanelled lawyers. Its operations span three verticals: Corporate Loans, SME & Other Loans, and Retail Loans. The retail segment has grown significantly, with AUM rising from ₹15,591.07 million in 2023 to ₹27,478.80 million in 2025, reflecting a CAGR of 20.79%.

3. Strategic Advantages

ARCIL benefits from its first-mover advantage and extensive experience navigating India’s regulatory landscape. The company maintains Net Owned Funds exceeding regulatory requirements, allowing it to act as a ‘resolution applicant’ under the Insolvency and Bankruptcy Code (IBC). ARCIL acquires stressed assets via multiple deal structures, including cash acquisitions, co-investor acquisitions, ordinary security receipts, and structured acquisitions. These strategies generate both fee income and investment income.

4. Technology and Expertise

The company leverages proprietary technology platforms for asset tracking, case management, and compliance monitoring. These tools assist in due diligence, asset valuation, recovery probability assessment, and litigation management.

5. Promoters and Management

ARCIL is promoted by Avenue India Resurgence Pte. Ltd (affiliate of Avenue Capital Group) and the State Bank of India. The management team, led by CEO and MD Pallav Mohapatra, brings decades of expertise in banking and stressed asset management.

Industry Outlook

1. Industry Growth Prospects

A. Acquisition Surge: In FY25, ARCs acquired ₹16.1 lakh crore worth of bad loans, a 60% increase from the previous year, driven by the transfer of legacy assets from the Stressed Assets Stabilisation Fund (SASF).

B. AUM Trends: The assets under management (AUM) of ARCs, measured through outstanding security receipts (SRs), are projected to decline by 4-6% to approximately ₹1.05 lakh crore in FY26, following a 15% drop in FY25.

2. Growth Drivers

A. Regulatory Support: The Reserve Bank of India (RBI) has mandated that ARCs achieve a net worth of ₹300 crore by March 2026, encouraging consolidation and capital infusion.

B. Market Evolution: ARCs are evolving into resolution managers, focusing on restructuring and turnaround strategies rather than merely acquiring distressed assets.

3. Strategic Shifts

A. Diversification: With the shrinking pool of non-performing assets (NPAs), ARCs are exploring alternative avenues such as retail loan portfolios and co-investment models to sustain growth.

B. Technology Integration: The adoption of advanced analytics and digital platforms is enhancing ARCs’ capabilities in asset management and recovery processes.

4. Company-Specific Outlook: Asset Reconstruction Company (India) Limited (ARCIL)

A. Retail Loan Focus: ARCIL has strategically increased its retail loan portfolio, with assets under management growing from ₹1,559.1 crore in FY23 to ₹2,747.9 crore in FY25, reflecting a compound annual growth rate (CAGR) of 20.79%.

B. Financial Performance: In FY2024, ARCIL reported a profit after tax (PAT) of ₹304 crore, with a gross balance sheet size of ₹2,872 crore and AUM of ₹15,230 crore.

How Will Asset Reconstruction Company (India) Limited Benefit

1. ARCIL can capitalise on the growing stressed asset market in India, increasing its portfolio and revenue streams.

2. The company’s strong focus on retail loans allows it to tap into a high-growth segment with rising stress levels.

3. Regulatory support and compliance with RBI’s net worth requirements position ARCIL to act as a resolution applicant under the IBC, expanding acquisition opportunities.

4. Diversification across corporate, SME, and retail segments mitigates risks and enhances portfolio stability.

5. Technology-driven processes improve asset tracking, recovery efficiency, and due diligence, boosting operational effectiveness.

6. ARCIL’s first-mover advantage and established relationships with banks and financial institutions enable preferential access to high-value stressed assets.

7. Co-investment and structured acquisition models provide both fee income and investment income, optimising returns.

8. The company’s experienced management and professional team strengthen its capacity to manage complex resolutions and maximise recoveries.

9. Expansion of AUM in retail and non-corporate segments enhances long-term growth potential and market positioning

Peer Group Comparison

There are no comparable listed companies in India that engage in a business similar to that of the company. Accordingly, it is not possible to provide an industry comparison as per the DRHP.

Key Strategies for Asset Reconstruction Company (India) Limited

1. Increasing Retail and SME Loans

Asset Reconstruction Company (India) Limited intends to grow its portfolio of retail, small, and medium enterprise (SME) loans. The company has increased its assets under management in these segments and believes its robust collection infrastructure and technology platform position it to capitalize on market growth.

2. Expanding the Corporate Loans Business

The company will continue expanding its corporate loans business by acquiring stressed assets, focusing on credit-worthy mid-sized companies and commercial real estate. Asset Reconstruction Company (India) Limited leverages its expertise and strategic partnerships to identify and resolve these high-potential assets.

3. Leveraging Technology and Data Analytics

The company continues to enhance its operational efficiency through technology and data analytics. It uses proprietary platforms and data-driven tools for portfolio acquisition, risk assessment, and collections, which allows it to scale its operations without a proportionate increase in costs.

4. Strengthening Retail Loan Collection

The company is strengthening its collection capabilities for retail loans through a robust infrastructure combining in-house managers and external agencies. It leverages technology like geo-tracking, heat maps, and AI models to optimize recovery strategies and accelerate the resolution of stressed assets.

5. Pursuing New Business Opportunities

The company is actively pursuing new opportunities by offering collection services to banks for a fee and acquiring stressed assets from Microfinance Institutions (MFIs). This strategy allows it to unlock new revenue streams and capitalize on a growing demand for micro-lending in India.