MUMBAI: In a first in the struggling asset reconstruction companies space, the oldest such entity, Arcil or Asset Reconstruction Company India, has filed the draft papers with Sebi for a primary issue seeking to mop up Rs 1,500 crore.
All the ARCs have been struggling after the insolvency and bankruptcy code became popular with lenders since July 2016. Since lenders are choosing the IBC route for large debt resolution, ARCs are now left with only retail assets, which typically do not go to the NCLTs for resolution. ARCs operate mostly with corporate loans and SME loans but the mainstay is retail loans. They earn revenue from management fees, recovery fees, investments, and write-backs.
Founded in 2002, Arcil, promoted by Avenue India Resurgence, which is an affiliate of Avenue Capital Group, and State Bank of India, which are identified as sponsors of the company under the Sarfaesi Act, is the country’s first asset reconstruction company and is currently among the largest private ARCs.
Though the press release did not specify the IPO size, i-banking sources told TNIE that the issue, which will be a pure offer for sale, will be in excess of Rs 1,500 crore.
Through the OFS, the selling shareholder will offer up to 10.5 crore shares with a face value of Rs 10 each.
The main selling shareholders are Avenue India Resurgence, which is an affiliate of Avenue Capital Group, offering up to 6.87 crore shares; State Bank of India selling up to 1.94 crore shares; Lathe Investment selling up to 1.62 crore shares and Federal Bank offering up to 10.35 lakh shares, according to the offer document.
According to recent data, Arcil has assets under management of Rs 15,230 crore and a net worth of Rs 2,462 crore, making it the second-largest by both metrics in the private ARC space.
It completed its first stressed asset acquisition in December 2003. As of March 2025, it had taken up 652 assets worth Rs 72,657.31 crore (at a cost of Rs 38,155.63 crore or 52.51% of the total principal debt) and made recoveries of Rs 28,459.7 crore from 199 cases, with 453 still open.