India’s first asset reconstruction firm ARCIL planning to go public

ARCIL is one of the largest asset reconstruction companies in India with gross assets under management (AUM) of Rs 16,926 crore as of December 31, 2024.

Asset Reconstruction Company (India) Limited or ARCIL, India’s first asset reconstruction company set up in 2002, is gearing up to go public and has initiated work on preparing the draft red herring prospectus for its proposed initial public offering, said people aware of the matter.

The ARC, which acquires non-performing assets or bad loans from Indian banks and other financial institutions, is sponsored by US-based Avenue Capital Group, which holds a 69.7% stake. The company is also sponsored by State Bank of India. Its other shareholders include Karnataka Bank, The South Indian Bank and Federal Bank.

“ARCIL is working with investment bank IIFL and law firm Trilegal, and other advisors to prepare for its plans to go public. The IPO will include a significant offer for sale portion, in which the existing shareholders will sell part of their stakes in the company. The details of who will sell how many shares are yet to be finalized,” said one of the people cited above, speaking on the condition of anonymity.

The size of the IPO is likely to be in the range of around Rs 1,000 - 1,500 crore, said a second person, also speaking on the condition of anonymity, adding that the final number is subject to change and will depend on the quantum of shares to be sold by the existing shareholders of the ARC.

ARCIL declined to comment on the development.

Avenue Capital, founded in 1995 by Marc Lasry and Sonia Garnder, manages over $11 billion in assets focusing on speciality lending, opportunistic credit and other special situations investments in USA, Europe and Asia.

It first picked up a stake in ARCIL in 2018, acquiring around 27 percent of the firm from a clutch of shareholders including GIC, IDFC Bank, First Rand Bank, Ashmore Capital, Barclays and Karur Vysya Bank.

Over the years it has bought stakes from other shareholders of ARCIL such as its acquisition of IDBI Bank’s entire 19 percent stake in 2022.

ARCIL Financial Performance

As per a March 20, report by credit rating agency ICRA, ARCIL is one of the largest asset reconstruction companies in India with gross assets under management (AUM) of Rs 16,926 crore as of December 31, 2024.

ARCIL reported a profit of Rs 249 crore in the first nine months of FY2025 on gross balance sheet size of Rs 3,067 crore and AUM of Rs 16,926 crore, while in FY2024, it reported a profit of Rs 304 crore on gross balance sheet size of Rs 2,872 crore and AUM of Rs 15,230 crore, as per the ICRA report.

The ARCIL issued security receipts aggregating Rs 3,235 crore in 9M FY2025, with 29% representing retail assets, compared to Rs 2,068 crore issued in FY2024 of which 26 percent was retail assets.

As on December 31, 2024, the AUM comprised corporate (66 percent), SME (19 percent) and retail loans (15 percent). Going forward, ARCIL plans to remain focused on acquiring SME and retail assets, ICRA noted.