Business Overview
Asset Reconstruction Company (India) Limited, known as Arcil, buys stressed loans from banks and financial institutions and works them out – through restructuring, enforcement of security under the SARFAESI Act, settlement with borrowers, resolution under the Insolvency and Bankruptcy Code, and collections – to recover more than it paid. It was incorporated on February 11, 2002 and received its certificate of registration from the Reserve Bank of India on August 29, 2003, making it the first asset reconstruction company incorporated in India per the CRISIL Report. Its first acquisition of stressed assets was completed in December 2003.
Assets are held in trusts that issue security receipts to qualified buyers; Arcil earns a management or trusteeship fee on the assets it manages and investment income on the security receipts it subscribes to itself. Per the CRISIL Report, Arcil was the second largest asset reconstruction company in India by assets under management, on a base of ₹16,852.57 Crore as of March 31, 2025, the second most profitable private ARC in Fiscal 2025, and held the second largest net worth among private ARCs.
Assets under management were ₹20,149.99 Crore as of March 31, 2026, of which Arcil’s own investment was ₹4,408.59 Crore or 21.88%. It operates three verticals – corporate loans at 68.75% of assets under management, retail loans at 23.55% and SME and other loans at 7.70%. Retail is the growth engine, rising from ₹1,942.30 Crore to ₹4,744.76 Crore over two years. Since inception it has acquired ₹89,909.34 Crore of principal debt at a cost of ₹44,114.43 Crore, or 49.07% of principal, and the trusts it manages have redeemed ₹22,400.03 Crore of security receipts against ₹44,114.43 Crore issued, a cumulative redemption ratio of 50.78%.
Arcil operates through 13 offices across 12 states including Delhi and employed 206 personnel as of March 31, 2026, working alongside 218 registered valuers, 206 collection agents and 988 empanelled lawyers. On a restated standalone basis, revenue from operations was ₹753.04 Crore in Fiscal 2026 against ₹596.42 Crore and ₹570.14 Crore, and profit after tax was ₹407.84 Crore against ₹355.32 Crore and ₹305.34 Crore, giving basic and diluted earnings per share of ₹12.55. Standalone net worth was ₹3,079.39 Crore and the capital to risk weighted assets ratio was 65.31%.
IPO Details
| Particulars | Details |
|---|---|
| IPO Date | Wednesday, September 9, 2026 to Friday, September 11, 2026 |
| Issue Type | 100% Book Built Offer – entirely an Offer for Sale; there is no Fresh Issue |
| Basis of Allotment | On or about Tuesday, September 15, 2026 |
| Tentative Listing Date | On or about Thursday, September 17, 2026, on BSE and NSE |
| Face Value | ₹10 per Equity Share |
| Price Band | ₹132 to ₹139 per Equity Share |
| Lot Size | 107 Equity Shares and in multiples thereof |
| Minimum Retail Investment | ₹14,873 for 1 lot of 107 Equity Shares at the upper band |
| Maximum Retail Investment | ₹1,93,349 for 13 lots of 1,391 Equity Shares at the upper band |
| Minimum HNI Investment | ₹2,08,222 for 14 lots (Small HNI); ₹10,11,364 for 68 lots (Big HNI), at the upper band |
| Offer Size | Up to 5,27,31,946 Equity Shares aggregating up to ₹732.97 Crore at the upper band |
| Fresh Issue | Nil |
| Post-Offer Market Capitalisation | ₹4,516.07 Crore at ₹139; ₹4,288.64 Crore at ₹132 |
| Promoter Holding (Pre-Offer) | 89.68% |
| Promoter Holding (Post-Offer) | 78.67% |
| Book Running Lead Managers | IIFL Capital Services Limited, IDBI Capital Markets & Securities Limited and JM Financial Limited |
| Registrar to the Offer | MUFG Intime India Private Limited |
Objects of the Offer
The Offer is entirely an Offer for Sale. The Company will not receive any proceeds from the Offer; the entire amount, net of the selling shareholders’ share of Offer related expenses and taxes, goes to the four selling shareholders in proportion to the Equity Shares each has offered.
| Issue Objects | Est. Amt (₹ Cr.) |
|---|---|
| Carrying out the Offer for Sale of up to 5,27,31,946 Equity Shares by the Selling Shareholders | 732.97 |
Key Strengths and Opportunities
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India’s First ARC, Ranked Second on Assets Under Management, Net Worth and Profitability
Arcil was the first asset reconstruction company incorporated in India, obtaining its certificate of registration from the Reserve Bank of India on August 29, 2003 and completing its first acquisition in December 2003, per the CRISIL Report. It was the second largest ARC in India by assets under management, the second most profitable private ARC in Fiscal 2025 and held the second largest net worth among private ARCs. Assets under management grew from ₹15,230.03 Crore as of March 31, 2024 to ₹20,149.99 Crore as of March 31, 2026. -
Regulatory Scale that Unlocks Acquisition Channels Closed to Smaller ARCs
When the Reserve Bank of India required all ARCs in October 2022 to maintain a minimum Net Owned Fund of ₹300.00 Crore by March 31, 2026, Arcil was one of the few ARCs already above that requirement. The Reserve Bank also permitted ARCs with Net Owned Fund above ₹1,000.00 Crore to act as resolution applicants under the Insolvency and Bankruptcy Code, and Arcil was one of only four ARCs above that threshold in October 2022, per the CRISIL Report. -
Disciplined Acquisition at a Widening Discount, Funded by a Broad Base of Sellers and Co-Investors
Arcil follows a structured credit assessment and risk management framework, using data analytics scorecards, credit information company scrubs, legal diligence, site visits and borrower financial analysis. Cumulative principal debt acquired rose from ₹64,564.54 Crore to ₹89,909.34 Crore over two years while the cumulative cost of acquisition fell from 52.94% of principal to 49.07%, indicating a wider acquisition discount as the company scaled. -
Resolution and Collections Infrastructure Across Three Verticals, with Improving Recovery Ratings
Arcil deploys resolution under the Insolvency and Bankruptcy Code, negotiated settlements, restructuring and rescheduling, and enforcement under the SARFAESI Act and through the Debt Recovery Tribunal. As of March 31, 2026 it worked with over 218 registered valuers and 206 collection agents and had over 988 lawyers empanelled, across offices in 12 states. Around 87.58% of rated assets under management carried a recovery rating of RR1+, RR1 or RR2 as of March 31, 2026, against 79.27% and 79.63% in the two prior years.
Key Risks
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Revenue Depends on Assets Under Management, and Fees are Charged Only on the Newer Part of that Book
Management and trusteeship fees range from 0.25% to 5.00% of the assets under management of the relevant trust and are charged where the vintage of those assets is less than eight years – yet ₹7,040.22 Crore of the ₹20,149.99 Crore book is more than eight years old. The Company states its assets under management may decline due to fewer stressed assets coming to market, increasing competition, stricter investment mandates or high security receipt redemption without matching new acquisitions. -
The Reserve Bank has Raised Repeated Supervisory Concerns Across Three Successive Inspections
In the last three Fiscals the Reserve Bank conducted two off-site assessments and inspections and one select-scope inspection under the SARFAESI Act. The reports raised concerns around regulatory compliance, acquisition and resolution policies, expected credit loss, dividend distribution, KYC, outsourcing, business continuity and due diligence processes. The Company states it has complied with most follow-on queries and is in the process of complying with a few, and that the Reserve Bank has not levied any penalty or taken enforcement action for these non-compliances in the preceding three Fiscals. -
Collections Have Fallen While the Book has Grown, and Recovery on the Largest Portfolios is a Fraction of Cost
Collections declined to ₹3,484.39 Crore in Fiscal 2026 from ₹3,882.66 Crore in Fiscal 2025 and ₹3,678.15 Crore in Fiscal 2024, even as assets under management rose from ₹15,230.03 Crore to ₹20,149.99 Crore. Write-offs on security receipts not redeemed within eight years increased to ₹71.96 Crore in Fiscal 2026 from ₹20.40 Crore and ₹4.95 Crore, while 34.94% of assets under management as of March 31, 2026 had already exceeded the eight-year period. -
Borrowings Have Risen Eightfold in Two Years and Interest Cover has Collapsed
Total borrowings on a consolidated basis rose to ₹1,205.50 Crore as of March 31, 2026 from ₹305.93 Crore and ₹149.95 Crore in the two prior years, taking debt to equity from 0.06 to 0.11 and then 0.41. Finance costs rose to ₹36.18 Crore from ₹12.49 Crore and ₹7.37 Crore and the interest coverage ratio fell to 13.84 times from 35.51 times and 59.72 times. -
Two-Thirds of the Book Sits in Corporate Loans, and the Top Ten Portfolios are Highly Concentrated
Corporate loans represented 68.75% of assets under management as of March 31, 2026, equal to ₹13,852.76 Crore of the ₹20,149.99 Crore book. The top ten corporate portfolios measured at outstanding book value were ₹6,896.80 Crore, or 22.09% of total assets under management. The Company states that economic slowdown, loan repayment delays, interest-rate volatility, cyclical downturns, regulatory changes and commodity price fluctuations could adversely affect recoveries from these stressed assets.
Financial Snapshot
| Key Performance Indicator | Units | FY2026 | FY2025 | FY2024 |
|---|---|---|---|---|
| Total Acquisition for the Year | ₹ Cr. | 5,958.80 | 3,975.87 | 2,068.98 |
| Total AUM | ₹ Cr. | 20,149.99 | 16,852.57 | 15,230.03 |
| Corporate Loans | ₹ Cr. | 13,852.76 | 12,720.01 | 11,956.40 |
| SME and Other Loans | ₹ Cr. | 1,552.47 | 1,384.69 | 1,331.33 |
| Retail Loans | ₹ Cr. | 4,744.76 | 2,747.88 | 1,942.30 |
| Collection or Recovery for the Year | ₹ Cr. | 3,484.39 | 3,882.66 | 3,678.15 |
| Cumulative SR Redemption Ratio | % | 50.78% | 51.79% | 51.31% |
| Revenue from Operations (Standalone) | ₹ Cr. | 753.04 | 596.42 | 570.14 |
| Revenue Growth (Standalone) | % | 26.26% | 4.61% | NA |
| Profit After Tax (Standalone) | ₹ Cr. | 407.84 | 355.32 | 305.34 |
| PAT Margin (Standalone) | % | 51.95% | 57.00% | 53.19% |
| Basic and Diluted EPS (Standalone) | ₹ | 12.55 | 10.94 | 9.40 |
| Net Worth (Standalone) | ₹ Cr. | 3,079.39 | 2,767.80 | 2,462.51 |
| Return on Average Equity (Standalone) | % | 13.95% | 13.59% | 12.99% |
| CRAR | % | 65.31% | 88.41% | 98.14% |
| Revenue from Operations (Consolidated) | ₹ Cr. | 721.69 | 581.76 | 605.82 |
| Profit After Tax Attributable to the Company (Consolidated) | ₹ Cr. | 351.69 | 329.51 | 330.46 |
| Total Borrowings (Consolidated) | ₹ Cr. | 1,205.50 | 305.93 | 149.95 |
| Debt to Equity (Consolidated) | x | 0.41 | 0.11 | 0.06 |
| Interest Coverage Ratio (Consolidated) | x | 13.84 | 35.51 | 59.72 |
Peer Comparison
| Company | Revenue (₹ Cr.) | P/E (x) | RoNW (%) |
|---|---|---|---|
| Asset Reconstruction Company (India) Limited | 753.04 | 11.08 | 13.95 |
| Listed Indian peers identified by the Company | None | NA | NA |
| Listed global peers identified by the Company | None | NA | NA |
Valuation
| Particulars | Details |
|---|---|
| Price Band | ₹132 to ₹139 per Equity Share |
| Post-Offer Market Capitalisation | ₹4,516.07 Crore at ₹139; ₹4,288.64 Crore at ₹132 |
| P/E on FY2026 Standalone EPS of ₹12.55 | 11.08 times at ₹139; 10.52 times at ₹132 |
| P/E on FY2026 Consolidated EPS of ₹10.82 | 12.85 times at ₹139; 12.20 times at ₹132 |
| P/B on Standalone NAV of ₹94.78 | 1.47 times at ₹139; 1.39 times at ₹132 |
| P/B on Consolidated NAV of ₹90.96 | 1.53 times at ₹139; 1.45 times at ₹132 |
| Market Cap / FY2026 Standalone Revenue from Operations | 6.00 times |
| Market Cap / Total AUM | 0.22 times |
| Market Cap / Company’s Share in AUM | 1.02 times |
| Industry Peer Group P/E | NA – the RHP identifies no comparable listed peer and provides no industry P/E |
| EV / EBITDA | NA – not a meaningful measure for an asset reconstruction company |
| Net Worth (Standalone, FY2026) | ₹3,079.39 Crore |
| Net Worth (Consolidated, FY2026) | ₹2,955.21 Crore |
| Total Borrowings (Consolidated, FY2026) | ₹1,205.50 Crore |
| Debt to Equity (Consolidated, FY2026) | 0.41 times |
| Return on Average Equity (Standalone, FY2026) | 13.95% |
Conclusion
Arcil offers an attractive long-term opportunity in India’s asset reconstruction space, supported by its established track record, strong market position and regulatory entry barriers. As the first ARC in India and the second-largest player by AUM, Arcil has built a diversified sourcing network and a strong resolution infrastructure. Its AUM increased to ₹20,150 Crore in FY26, while retail AUM has grown sharply, providing an additional growth avenue. The company also continues to acquire stressed assets at a discount, with cumulative acquisition cost declining to 49.07% of principal debt. Financial performance remains healthy, with standalone revenue and PAT growing 26.3% and 14.8%, respectively, in FY26. At the upper price band of ₹139, the stock is valued at 11.1x FY26 standalone earnings and 1.47x book value, which appears reasonable given its profitability and capital position. However, investors should monitor RBI supervisory concerns, declining collections, rising borrowings and the ageing of the asset book. The absence of listed peers also makes relative valuation difficult. Overall, Arcil’s strong franchise, growth potential and reasonable valuation outweigh these concerns for investors with a long-term horizon. Hence, we recommend to Subscribe this IPO for Long Term.
