Mumbai: Asset Reconstruction Company (India) Limited (ARCIL), India’s first and oldest asset reconstruction company, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), marking a significant step towards its proposed ARCIL IPO.
The initial public offering will be a pure offer for sale (OFS) of up to 10,54,63,892 equity shares of face value ₹10 each. The OFS will include:
- 6,87,39,034 shares by Avenue India Resurgence Pte. Ltd,
- 1,94,45,000 shares by State Bank of India,
- 1,62,44,858 shares by Lathe Investment Pte. Ltd, and
- 10,35,000 shares by The Federal Bank Ltd.
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Pioneer in India’s ARC Ecosystem
Incorporated in 2002, ARCIL was the first company in India’s asset reconstruction space and continues to be a market leader. As of March 31, 2025, it was the second-largest ARC in India by assets under management (AUM) at ₹16,852.57 crore, and among the top private ARCs in net worth with ₹2,767.80 crore (standalone).
With over two decades of experience, ARCIL operates across three core business verticals:
- Corporate loans
- SME and other loans
- Retail loans
The company’s revenue model includes management and trusteeship fees, portfolio recovery fees, investment income, and write-backs from resolved assets.
Promoters & Leadership
ARCIL is promoted by Avenue India Resurgence Pte. Ltd. (an affiliate of Avenue Capital Group) and State Bank of India, both registered as sponsors under the SARFAESI Act. The company is professionally managed by a senior leadership team including:
- Pallav Mohapatra – CEO & MD
- Phanindranath Kakarla – President
- Pramod Gupta – CFO
- Rajat Agarwal – Head of Acquisitions (Corporate, SME, Other Loans)
- Anup Satish Mittal – Head of Acquisitions (Retail Loans)
ARCIL IPO: Operational Scale and Performance
ARCIL has built a strong national presence, operating in 12 states and collaborating with:
- 201 registered valuers
- 163 collection agents
- 950 empanelled lawyers
It maintains partnerships with 30 private banks, 28 public sector banks, 2 co-operative banks, 41 NBFCs, 17 housing finance companies, and 7 other selling institutions.
The company has formed 652 asset trusts to manage acquisitions, of which 453 are currently active. Since inception, it has acquired stressed assets totaling ₹72,657.31 crore at a cost of ₹38,155.63 crore, reflecting a purchase ratio of 52.51%. It has recovered ₹28,459.7 crore.
ARCIL IPO: Strong Financial Metrics
For the fiscal year ending March 31, 2025:
- Revenue from operations: ₹596.42 crore
- Total income: ₹623.40 crore
- Profit After Tax (PAT): ₹355.32 crore
- PAT margin: 57%
According to industry data, ARCIL had the highest PAT-to-AUM ratio (1.94%), highest return on assets (11.48%), and lowest operating expense ratio (0.57%) among the top seven ARCs. It also recorded the lowest debt-to-equity ratio (0.06) among top private ARCs.
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The company’s capital adequacy ratio stood at 99.03%, significantly higher than peers, further reinforcing its robust financial position.
ARCIL IPO: Strategic Focus on Retail Loans
Amid growing stress in the retail loan segment, ARCIL has increased focus on this vertical. The AUM of retail loans rose from ₹1,559.11 crore in FY23 to ₹2,747.88 crore in FY25, reflecting a CAGR of 20.79%.
The CRISIL Report highlights that the retail loan market in India expanded from ₹32 trillion in FY20 to ₹67 trillion in FY25, while stressed retail loans nearly doubled from ₹3.47 lakh crore to ₹6.92 lakh crore, creating opportunities for ARCs to scale.
ARCIL IPO Management
IIFL Capital Services Ltd, IDBI Capital Markets & Securities Ltd, and JM Financial Ltd are appointed as the book-running lead managers for the ARCIL IPO.
