Asset Reconstruction Company

India's First ARC with the second Largest AUM

The company was the first ARC to be incorporated in India, obtaining its certificate of registration on August 29, 2003. The company was the second largest ARC in India in terms of AUM with ₹ 168,525.70 million as of March 31, 2025, and the second most profitable private ARC with a profit after tax of ₹ 3,553.19 million during Fiscal 2025.

Expertise in Acquiring Stressed Assets with increasing investment in SRs

The company has developed expertise in acquiring stressed assets through a disciplined acquisition process with comprehensive credit assessment and risk management framework. The company has established strong relationships with 32 private sector banks, 28 public sector banks, 51 non-banking financial companies, and 18 housing finance companies since inception.

Ability to Implement Resolution Strategies and a Robust Collections Framework

The company utilizes different resolution strategies including IBC mechanisms, mutual settlements, debt restructuring, and asset sales under SARFAESI Act. The company has established specialized collection teams across three business verticals and worked with over 206 collection agents as of March 31, 2026.

Track Record of Consistent Financial and Operational Performance

The company has demonstrated consistent financial performance with a cumulative SR Redemption Ratio of 50.78% as of March 31, 2026. The company maintains strong financial management with a net worth of ₹ 30,793.93 million on standalone basis and credit rating of ICRA 'AA- (Stable)' as of March 31, 2026.

Experienced Board of Directors, Management Team and Marquee Investors

The company is led by experienced management team with extensive domain expertise. The company's promoters include Avenue India Resurgence Pte. Ltd (holding 69.73% equity) and State Bank of India (holding 19.95% equity), providing strong strategic support and leadership.

Revenue and Profit Dependency on AUM Value and Composition

The company's revenue is largely dependent on management fees and investment income from stressed asset portfolios, with management fees ranging from 0.25% to 5.00% of AUM. Any decrease in AUM may cause a decline in fees and investment income, adversely affecting revenue and profit.

RBI Non-Compliance and Regulatory Penalties

The company is subject to periodic RBI inspections and has received multiple supervisory observations requiring compliance actions. Non-compliance with RBI directions can result in penalties up to ₹10 million or twice the quantifiable amount, and potential license cancellation.

Competitive Bidding Process for Stressed Asset Acquisition

The company acquires stressed assets through competitive bidding processes including Swiss challenge and anchor mechanisms. In Fiscals 2026, 2025 and 2024, the company won 79.29%, 69.13% and 36.43% respectively of bids participated, with inability to acquire sufficient assets at appropriate prices potentially affecting growth and operations.

Recovery Risk from Stressed Assets

The company's income depends on ability to recover outstanding amounts from stressed assets through various resolution strategies. Borrowers are often in weak financial positions, and recovery procedures are time-consuming and costly, with no assurance of sufficient recovery to cover investments.

Corporate Loans Concentration Risk

Corporate loans represent 68.75%, 75.48% and 78.51% of AUM as of March 31, 2026, 2025 and 2024 respectively. Any adverse factors affecting corporate borrowers such as economic slowdown, interest rate volatility, or regulatory changes may significantly impact the company's business and financial condition.

Information Technology System Dependencies and Cyber Security Risks

The company relies significantly on IT systems for operations, with retail loans business particularly dependent on technology for collections using data analytics and scorecards. System failures, cyber threats, or inability to adapt to technological changes may adversely affect business operations and financial performance.

Regulatory Compliance and Capital Adequacy Requirements

The company must maintain minimum net owned fund of ₹3,000 million and capital adequacy ratio of 15% of risk weighted assets. As the company grows, additional capital may be required to maintain compliance, and regulatory changes may increase compliance costs or divert management attention.

Capital Intensive Business Operations

The company requires substantial capital for acquiring stressed assets and relies on lenders and security receipt issuances by managed trusts. Any disruption in capital sources or inability to attract qualified buyers for security receipts could adversely affect business operations and growth.

Third Party Service Provider Dependencies

The company relies on 218 registered valuers, 206 collection agents and over 988 empanelled lawyers as of March 31, 2026. Third-party collectors handled 4.44% of total collections in Fiscal 2026, and any disruption, negligence, or fraud by these providers could adversely affect business and reputation.

Debt Financing and Covenant Compliance Risk

The company has total borrowings of ₹12,054.95 million as of March 31, 2026, with financing agreements containing conditions requiring lender consent for various activities. Failure to comply with financial covenants or obtain necessary consents could significantly impact business operations.