National : Asset Reconstruction Company (India) Limited, pioneer in the asset reconstruction industry and the first ARC to be incorporated in India, has filed its Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI).

The IPO comprises of an offer for sale of up to 105,463,892 Equity Shares of face value of ₹10 each. The offer for sale comprises of up to 68,739,034 equity shares of face value of ₹10 each by Avenue India Resurgence Pte. Limited, up to 19,445,000 equity shares of face value of ₹10 each by State Bank of India, up to 16,244,858 equity shares of face value of ₹10 each by Lathe Investment Pte. Limited and up to 1,035,000 equity shares of face value of ₹10 each by The Federal Bank Limited.

Established in 2002, Asset Reconstruction Company (India) Limited is a pioneer in the asset reconstruction industry and was the first ARC to be incorporated in India. Having over two decades of operations, it was the second largest in terms of assets under management (AUM) at ₹15230.031 Crores and had the second highest net worth among private ARCs in India at ₹2462.511 Crores. ARCIL operates across three business verticals including corporate loans, SME and other loans, and retail loans classifying acquired stressed assets based on internally assessed resolution mechanism. It primarily derives its revenue from management fees/ trusteeship fees, portfolio recovery fees, income from investments and write backs.

ARCIL is promoted by Avenue India Resurgence Pte. Ltd (an affiliate of Avenue Capital Group) and the State Bank of India, which are also identified as sponsors of the Company under the SARFAESI Act. The company is led by a professional and experienced management team who have extensive domain expertise and understanding of our industry and vision to scale up the business including Mr. Pallav Mohapatra, Chief Executive Officer and Managing Director, Mr. Phanindranath Kakarla, President, Mr. Pramod Gupta, Chief Financial Officer, Mr. Rajat Agarwal, Head of acquisitions for Corporate, SME and Other loans as well as Mr. Anup Satish Mittal, Head of acquisitions for Retail loans.

It operates across 12 states in the country and is engaged in the business of acquiring stressed assets from banks and financial institutions as well as implementing resolution strategies through restructuring, enforcement of rights on underlying securities and settlement aimed at maximizing recovery and optimizing the value of such stressed assets in order to generate revenue streams.

It completed its first stressed asset acquisition in December 2003 and was one of the few ARCs who’s Net Owned Funds were in excess of the regulatory requirement when RBI established the rules in 2022. Only 4 ARCs have met this criteria as on 31st March 2024

It collaborates with 201 registered valuers, 163 collection agents, and 950 empanelled lawyers and has established strong relationships with 30 private sector, 2 co-operative and 28 public sector banks besides 41 non-banking financial companies, 17 housing finance companies and seven other selling institutions.

As of March 31, 2025, they had formed an aggregate of 652 trusts, of which 199 were closed where they had resolved all the financial assets in such trusts and 453 trusts are currently open.  For the same period, they acquired ₹ 72,657.307 Crores in total principal debt at a cost of ₹ 38,155.632 crores or 52.51% of the total principal debt and made recoveries of ₹ 28,459.7 crores.

In FY24, the company was the second largest ARC in India by revenue from operations (excluding unrealized fair value changes) at ₹570.141 Crores. It recorded the lowest expenses as a percentage of average total AUM at 0.57% among the top 7 ARCs. The company had the highest profit after tax as a percentage of average AUM at 1.94%, the highest return on assets at 11.48%, and a capital adequacy ratio of 99.03%, which was approximately 40% higher than the next highest private ARC. It also had the second highest cumulative SR redemption rate at 51.31% and the lowest debt-to-equity ratio among the top 6 private ARCs at 0.06, as of March 31, 2024. The company’s financial strength is highlighted from a strong balance sheet characterized by a net worth of ₹ 2767.798 Crores on a standalone basis and ₹ 2663.141 Crores on a consolidated basis, as of March 31, 2025.

During Fiscals 2025, 2024 and 2023, the company acquired ₹ 3975.871 Crores, ₹ 2068.982 Crores and ₹ 4288.962 Crores of stressed assets, respectively, and the AUM was ₹ 16852.570 Crores as of March 31, 2025, ₹ 15230.031 Crores as of March 31, 2024 and ₹ 16223.483 Crores as of March 31, 2023.

According to the CRISIL Report, the stressed assets opportunity is shifting from corporate to non-corporate loans with the retail segment in particular experiencing rising stress levels. The overall outstanding amount under the retail segment (including housing loans, vehicle loans, consumer loans, credit cards, educational loans, and personal loans) has grown at a CAGR of 15.7% over the last five years from approximately ₹ 32 trillion, as of March 31, 2020 to approximately ₹ 67 trillion as of March 31, 2025. The total stress under the retail segment in banks and NBFCs has increased from ₹ 3,46,950 crores in Fiscal 2020 to ₹ 6,92,450 Crores in Fiscal 2025 at a CAGR of 14.8%. The company has focused on increasing the proportion of Retail loans in their portfolio. The AUM of Retail loans have grown from ₹ 1559.107 Crores as of March 31, 2023 to ₹ 2747.88 Crores as of March 31, 2025, at a CAGR of 20.79%.

For the year ended 31st March 2025, the revenue from operations stood at Rs 596.423 Crores total income stood at Rs 623.399 Crores, PAT stood at Rs 355.319 Crores and PAT margin stood at 57%

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