Asset Reconstruction Company (India) is seeing an encouraging response from banks and non-banking financial companies to its new Collection-as-a-Service (CaaS) business, as the asset reconstruction company looks to build fee-based businesses alongside its core stressed-asset resolution operations.
Arcil, which is set to become India’s first listed asset reconstruction company, is preparing to launch its ₹733-crore initial public offering (IPO) next week, with the price band fixed at ₹132-139 a share.
The issue, entirely an offer for sale (OFS) of up to 5.27 crore equity shares, will open for subscription on September 9 and close on September 11.
“It’s at the very beginning stage. We started about six months back, and we are getting a very encouraging response from the BFSI sector,” Pramod Kumar Gupta, chief financial officer of Arcil told businessline in an interview.
Gupta said the company is receiving an encouraging response from the BFSI sector, although it is too early to assess the eventual size of the business.
The company sees its status as a regulated entity as a potential differentiator from conventional collection agencies. Banks and NBFCs already use collection agencies, but ARCIL’s experience in managing a large retail book and its regulatory framework could help it gain market share, Gupta said.
Arcil’s assets under management stood at ₹20,150 crore at the end of March, while its capital adequacy ratio is close to 65 per cent.
The company is also looking at the microfinance institution (MFI) segment as another potential growth avenue. Gupta said the company has invested in some MFI assets but is taking time to build expertise before expanding significantly in the segment.
“The flavor of the stress cycle keeps changing. Five years back, it was corporate. Now it is retail and SME. So, we have created very strong franchises across all these three sectors,” he said.
Arcil’s retail and SME business has grown nearly four times over the past five years, and accounts for almost 32 per cent of the business. The company currently manages a retail book of about ₹4,500 crore, with principal outstanding of around ₹20,000 crore, covering nearly 35 lakh borrowers.
Despite increasing competition from other ARCs and alternative investment investors, Gupta said he sees sufficient room for the industry to grow as banks and other lenders continue to generate stressed assets. “In any case, the entire ARC industry together manages roughly about 10-12 per cent of the total stress that we see in the Indian BFSI system,” he said.
The company’s retail strategy involves greater use of technology to make collections more efficient and cost-effective, while building a wider presence in SME assets across India. Arcil is already present across housing, loan-against-property, vehicle, unsecured loans, credit cards, personal loans and education loans, while it is taking a more cautious approach to MFI.
The firm received regulatory nod for the IPO in August 2025. Avenue India Resurgence and State Bank of India, which together hold 89.68 per cent stake, will be selling their shares, bringing their stake down to 78.67 per cent following the OFS. Other investors such as Lathe Investment and Federal Bank will also sell their shares. Arcil itself will not receive any proceeds from the issue.