Asset Reconstruction Company (India) Files RHP for September 9 IPO

Asset Reconstruction Company (India) Ltd., commonly known as Arcil, has filed its red herring prospectus for an initial public offering scheduled to open on Sept. 9, putting one of India’s oldest stressed-asset specialists on course for a public listing.

The issue will be entirely an offer for sale of up to 52,731,946 equity shares with a face value of ₹10 each. There is no fresh issue, so the IPO will not add new equity capital to the company. Existing shareholders will instead sell part of their holdings, with bidding set to close on Sept. 11 after an anchor investor session on Sept. 8.

The shares are proposed to list on both BSE and the National Stock Exchange of India, with NSE designated as the stock exchange for the offer. The price band and minimum bid lot were not stated in the abridged prospectus posted by the Securities and Exchange Board of India and are due to be finalized separately.

Four shareholders are selling stock in the IPO

The SEBI-hosted abridged prospectus shows that the offering is being split among four selling shareholders. Avenue India Resurgence Pte. Ltd. can sell up to 24,823,910 shares, State Bank of India up to 10,963,062, Lathe Investment Pte. Ltd. up to 16,244,858, and Federal Bank Ltd. up to 700,116.

Avenue India Resurgence and State Bank of India are Arcil’s promoters. Before the offer, Avenue held 226,566,265 shares, representing 69.73% of the company, while SBI held 64,816,980 shares, or 19.95%. Lathe Investment owned 16,244,858 shares, equivalent to 5.00%, and Federal Bank owned 4,139,300 shares, or 1.27%.

The offer therefore represents a partial exit for Avenue and SBI, a full exit for Lathe if its entire offered block is sold, and a smaller sell-down for Federal Bank. Because the issue contains no fresh shares, the amount ultimately raised will depend on the price band and final offer price, and the proceeds will relate to the shareholders selling stock rather than a primary capital raise by Arcil.

The RHP is dated Sept. 1, 2026, and SEBI posted the filing on Sept. 2. The timetable sets the anchor investor bidding date for Sept. 8, the public offer opening for Sept. 9 and the closing date for Sept. 11. The offer is being run through the book-building process, with IIFL Capital Services, IDBI Capital Markets & Securities and JM Financial listed as the book-running lead managers. MUFG Intime India is the registrar.

Arcil enters the market with ₹201.5 billion of assets under management

Arcil operates in India’s asset reconstruction industry, buying stressed assets from banks and financial institutions and seeking recoveries through restructuring, enforcement against underlying security and negotiated settlements. The company says it was the first asset reconstruction company incorporated in India and received its Reserve Bank of India registration to begin operations on Aug. 29, 2003.

Its business depends on acquiring pools of stressed loans and then generating returns through recovery and resolution. Revenue comes from management and trusteeship fees, portfolio recovery fees, income from investments and write-backs. Arcil said it had worked with dozens of public and private sector banks, non-bank lenders and housing finance companies since inception, giving it a broad base of institutions from which it can acquire stressed assets.

The operating figures in the prospectus show a larger platform going into the IPO. Total assets under management reached ₹201.50 billion at March 31, 2026, up from ₹168.53 billion a year earlier and ₹152.30 billion at March 31, 2024. Arcil’s own share of total AUM rose to ₹44.09 billion from ₹32.98 billion in fiscal 2025.

Acquisition activity also increased. Total acquisitions during fiscal 2026 were ₹59.59 billion, compared with ₹39.76 billion the previous year, while Arcil’s share of those acquisitions rose to ₹20.23 billion from ₹12.81 billion. Collections and recoveries were ₹34.84 billion in fiscal 2026, below ₹38.83 billion a year earlier.

The restated consolidated financial statements show total income of ₹7.50 billion for fiscal 2026, up from ₹6.08 billion in fiscal 2025. Restated consolidated profit for the year increased to ₹3.23 billion from ₹3.09 billion. Net worth rose to ₹29.55 billion from ₹26.63 billion, although total borrowings increased sharply to ₹12.05 billion from ₹3.06 billion.

On a standalone basis, revenue from operations was ₹7.53 billion in fiscal 2026, compared with ₹5.96 billion in fiscal 2025, and profit after tax rose to ₹4.08 billion from ₹3.55 billion. The prospectus also reports a standalone debt-to-equity ratio of 0.39 times for fiscal 2026, up from 0.11 times a year earlier.

The IPO gives investors exposure to stressed-asset recovery risk

The business can benefit when banks and other lenders sell problem loans, but the prospectus makes clear that Arcil’s earnings are tied closely to both the volume of stressed assets it can acquire and its ability to recover value from them. Management lists changes in the value and composition of AUM as a key risk because fees and profits depend heavily on the assets under management.

Arcil also competes for stressed assets through auction-style processes, including Swiss challenge and anchor mechanisms. If it cannot source enough assets at suitable prices, the company says growth and profitability could be affected. After acquisition, recoveries may take longer than expected or may fall short altogether, creating another direct link between execution and financial results.

Portfolio concentration is another consideration. Corporate loans represented 68.75% of AUM at March 31, 2026, although that was down from 75.48% a year earlier and 78.51% in fiscal 2024. A deterioration in recoveries from large corporate exposures could therefore have an outsized impact on results even as Arcil seeks to increase the share of retail, small and medium enterprise and other loans in its portfolio.

Regulatory oversight is also central to the model. Arcil operates under RBI supervision, and the prospectus warns that failures to address regulatory observations could lead to penalties or restrictions. It also notes that tighter rules for asset reconstruction companies could raise compliance costs or limit operating flexibility.

For investors, the Sept. 9 offering will provide a listed route into a business tied to India’s stressed-credit cycle rather than conventional loan growth. The prospectus says Arcil is pursuing more retail and SME assets while continuing to grow its corporate-loan business and expand the use of technology and data analytics in collections and recovery.

The next key detail is the price band. Until that is announced, investors can assess the size of the secondary share sale, Arcil’s financial record and the ownership changes implied by the offer, but not the valuation at which the company will come to market. Bidding is due to begin Sept. 9, with the final offer price to be determined through the book-building process.