Avenue Capital Group-backed Asset Reconstruction Company (India) Ltd (ARCIL) has filed its draft red herring prospectus (DRHP) with markets regulator Sebi on Friday to raise funds through an initial public offering (IPO).The IPO will be entirely an offer for sale (OFS) of up to 10.54 crore equity shares by existing promoters and shareholders. ARCIL will not receive any proceeds from the public issue, PTI reported.As part of the OFS, New York-based Avenue Capital, through its affiliate Avenue India Resurgence Pte Ltd, will offload up to 6.87 crore equity shares. State Bank of India plans to sell 1.94 crore shares, while Federal Bank Ltd will divest 10.35 lakh shares.Singapore’s sovereign fund GIC, through its arm Lathe Investment Pte Ltd, will exit the company by selling up to 1.62 crore shares, equivalent to a 5 per cent stake.ARCIL, the first asset reconstruction company incorporated in India, facilitates debt resolution by acquiring stressed assets from banks and financial institutions. It implements recovery strategies through restructuring, enforcement of rights on underlying securities, and settlements to maximise recovery value.Registered with the RBI in August 2003 under the SARFAESI Act, ARCIL completed its first asset acquisition in December 2003.According to a CRISIL report, ARCIL was the second most profitable ARC in FY24, with a standalone profit of Rs 305.34 crore. It also ranked second in assets under management (AUM) at Rs 15,230 crore and held the second-largest net worth among private ARCs at Rs 2,462.5 crore as of March 31, 2024.By March 31, 2025, ARCIL had acquired total principal debt worth Rs 72,657 crore at a cost of Rs 38,156 crore, or 52.51 per cent of the total, and achieved recoveries of Rs 28,460 crore. Its total borrowings stood at Rs 305.99 crore.The Mumbai-headquartered company competes with Edelweiss ARC, Phoenix ARC, JM Financial ARC, ACRE, and Omkara.IIFL Capital Services, IDBI Capital Markets & Securities, and JM Financial are the book-running lead managers for the IPO, while MUFG Intime India is the registrar. The equity shares are proposed to be listed on BSE and NSE.
