IPO closes on 11 Sep'26
Asset Reconstruction Company (India) Limited
Minimum Investment
₹ 14,873 / 107 shares
Our Verdict:
Neutral
- ARCIL (Asset Reconstruction Company India Limited) is India's first asset reconstruction company, registered in 2003, and the second-largest ARC in India by AUM as of March 2025; standalone total income grew from ₹574.11 crore (FY24) to ₹785.08 crore (FY26), and PAT grew from ₹305.34 crore to ₹407.84 crore over the same period, with EBITDA margin consistently above 70%.
- This offering is entirely an exit for existing shareholders: the Offer comprises 100% Offer for Sale with no Fresh Issue at all, meaning the Company itself will not receive any proceeds — the entire raise goes to Promoters Avenue India Resurgence Pte. Ltd. and State Bank of India, along with two other selling shareholders.
- Underlying business trends are mixed: the Company's share of new industry-wide stressed-asset acquisitions fell from 45.67% (FY24) to 33.95% (FY26), even as its share of total industry AUM rose from 18.14% to 21.88% over the same period — deal-flow competitiveness has increased even as the Company's existing book has grown as a share of the market.
- Leverage has risen from a very low base: standalone borrowings jumped from ₹305.99 crore (FY25) to ₹1,206.37 crore (FY26), pushing the Debt-to-Equity ratio from 0.11x to 0.39x — still moderate in absolute terms, but a meaningful shift from the near-debt-free position of prior years.
- Genuine category leadership, consistently high margins, and strong institutional backing (SBI, Avenue Capital) support the fundamentals of an asset-light, fee- and recovery-driven business, but because this is a pure secondary sale with no capital going to the Company, and because industry acquisition-share and leverage trends have both moved in less favourable directions recently, the investment case rests entirely on ARCIL's existing book and management quality rather than on new capital being deployed for growth.
About the company
Founded in
1 Jan'02
Managing director
Phanindranath Kakarla
- ARCIL (Asset Reconstruction Company India Limited) is an asset reconstruction company that acquires stressed assets from banks and financial institutions and implements resolution strategies through restructuring, enforcement of security rights and settlement, aiming to maximise recovery value.
- The Company was the first ARC to be incorporated in India, having obtained its certificate of registration from the RBI on August 29, 2003, and was the second-largest ARC in India by Assets Under Management (₹16,852.57 crore) and the second most profitable private ARC in India (standalone PAT of ₹355.32 crore) as of/for Fiscal 2025, per the CRISIL Report.
- The Company operates through 13 offices across 12 states in India, and has worked with 32 private sector banks, 28 public sector banks, 51 non-banking finance companies, 18 housing finance companies and 7 other selling institutions since inception to acquire stressed assets.
- Promoters: Avenue India Resurgence Pte. Ltd. (a Singapore-incorporated investment holding entity) and State Bank of India; the Company is led operationally by CEO & Managing Director Phanindranath Kakarla.
STRENGTHS
- India’s First ARC with the Second-Largest AUM: The first asset reconstruction company registered in India (2003) and the second-largest ARC in India by AUM as of March 2025, per the CRISIL Report.
- Revenue and Profit Growth: Total income (standalone) grew from ₹574.11 crore (FY24) to ₹785.08 crore (FY26); PAT grew from ₹305.34 crore to ₹407.84 crore over the same period.
- High, Stable Margins: EBITDA margin (standalone) was 78.21% in FY26 (82.47% in FY25, 72.33% in FY24), and PAT margin remained above 50% in each of the last three fiscal years.
- Diversified Institutional Relationships: Since inception, has worked with 32 private sector banks, 28 public sector banks, 51 non-banking finance companies, 18 housing finance companies and 7 other selling institutions to acquire stressed assets.
- Backing from Marquee Promoters: Promoted by Avenue India Resurgence Pte. Ltd. (an affiliate of global investment firm Avenue Capital Group) and State Bank of India, India’s largest bank.
RISK FACTORS
- Revenue Tied to AUM Composition and Value: Revenue and profit are largely dependent on the value and composition of Assets Under Management; any adverse change in AUM could directly impact results.
- Heavy Corporate Loan Concentration: Corporate loans represented 68.75% of AUM as of FY26 (down from 78.51% in FY24 but still the majority); adverse developments in the corporate stressed-asset segment could materially affect the business.
- Declining Share of New Stressed-Asset Acquisitions: The Company's share of total industry stressed-asset acquisitions fell from 45.67% (FY24) to 33.95% (FY26), even as its share of total industry AUM rose over the same period, reflecting increased competition for new deal flow.
- Rising Borrowings: Total borrowings (standalone) increased sharply from ₹305.99 crore (FY25) to ₹1,206.37 crore (FY26), with the Debt-to-Equity ratio rising from 0.11x to 0.39x over the same period.
- Regulatory and Recovery Risk: The business depends on the RBI's regulatory framework and on the Company's ability to recover outstanding amounts from acquired stressed assets in a timely manner; non-compliance with RBI observations or an inability to recover assets could adversely affect results.
Financials
All Values are in Cr.
Issue details
Issue type
Mainboard
Issue size
₹ ₹732.97 crore
Fresh Issue
₹ Not Applicable
OFS
₹ ₹732.97 crore
Price range
₹ 132 - 139
Lot size
107 shares
Issue Objective
- The Offer comprises entirely an Offer for Sale of up to 52,731,946 Equity Shares by the Selling Shareholders (Avenue India Resurgence Pte. Ltd., State Bank of India, Lathe Investment Pte. Ltd. and The Federal Bank Limited); the Company will not receive any proceeds from the Offer.
Dates
Bidding open
9 Sep'26
Bidding close
11 Sep'26
Allotment date
15 Sep'26
Refund date
16 Sep'26
Listing
17 Sep'26
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document (PDF)
© 2026 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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