ARCIL files for IPO: India’s first ARC eyes public markets after 2 decades in resolution

India’s oldest asset reconstruction company, ARCIL, has filed draft papers with SEBI to launch its IPO, marking a major milestone for the country’s stressed asset resolution sector.

Asset Reconstruction Company (India) Limited (ARCIL), the first ARC incorporated in India, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), setting the stage for a significant public offering.

The IPO is an offer for sale (OFS) of up to 10.5 crore equity shares, comprising contributions from existing shareholders: Avenue India Resurgence Pte. Ltd (6.87 crore shares), State Bank of India (1.94 crore), Lathe Investment Pte. Ltd (1.62 crore), and The Federal Bank Ltd (10.35 lakh).

Founded in 2002, ARCIL has grown into India’s second-largest ARC by AUM, managing stressed assets worth ₹16,852.57 crore as of March 31, 2025. It operates across three verticals—corporate, SME, and retail loans, classifying acquired assets based on internal resolution strategies.

According to the DRHP, ARCIL made recoveries of ₹28,459.7 crore from a total acquired principal debt of ₹72,657.31 crore at a cost of ₹38,155.63 crore, indicating a recovery-to-investment efficiency of over 74%. Its PAT stood at ₹355.31 crore in FY25, with a robust PAT margin of 57%.

Financially, the company stands out with a capital adequacy ratio of 99.03%, the lowest debt-to-equity ratio (0.06) among top private ARCs, and a net worth of ₹2,767.8 crore. It recorded the highest return on assets (11.48%) and best profit-to-AUM ratio (1.94%) among leading private ARCs in FY24.

ARCIL is jointly promoted by Avenue Capital Group (via Avenue India Resurgence Pte. Ltd) and State Bank of India, and is run by a seasoned management team led by CEO Pallav Mohapatra.

The company is also ramping up its retail loan focus. Its retail AUM grew at a CAGR of 20.79%, from ₹1,559 crore in FY23 to ₹2,747.88 crore in FY25, aligning with CRISIL’s forecast that stressed retail assets in India could reach ₹6.92 lakh crore by FY25.

Bookrunners for the issue are IIFL Capital, IDBI Capital Markets & Securities, and JM Financial.