ARCIL Eyes Fee‑Based Services as It Gears Up for Historic IPO

India’s inaugural asset reconstruction company, Asset Reconstruction Company (India) Limited – better known as ARCIL – is turning a page. The firm told Reuters it’s now looking at fee‑based businesses, such as acting as a recovery and collection agent for lenders, to fuel its next growth spurt.

That shift comes just days before ARCIL launches its initial public offering on September 9, making it the first ARC to go public on a domestic exchange. The IPO will float up to 52.73 million shares, priced between ₹132 and ₹139 each, which translates to a potential issue size of about ₹7.33 billion (roughly $77.6 million). At the top of the band, the implied market cap hovers around ₹4,516 crore.

Regulatory green‑light was granted back in August 2025, and the company’s shareholding pattern will change a bit after the offer. Avenue India Resurgence – an affiliate of New York‑based Avenue Capital Group – and State Bank of India together own about 89.68 % of ARCIL today. Post‑IPO, their combined stake would shrink to roughly 78.67 %, assuming the whole offer is allotted. Other shareholders, like Lathe Investment and Federal Bank, will also be trimming their positions.

What’s interesting is that ARCIL says it doesn’t need fresh capital for its growth plans. CEO Phanindranath Kakarla highlighted a robust capital adequacy ratio near 65 % and pointed out that internal accruals should comfortably fund short‑term needs. “It’s important that the first ARC listing comes from a position of strength,” he told Reuters.

On the balance sheet side, ARCIL’s assets under management (AUM) stood at ₹20,150 crore as of the end of March. Collections, however, dipped to ₹3,484 crore in fiscal 2026 from ₹3,882 crore the previous year. Still, CFO Pramod Kumar Gupta emphasized that retail recoveries remain solid, noting that the firm is collecting about 25 % of its opening AUM – a figure he considers healthy.

Looking ahead, ARCIL is sharpening its focus on retail‑sized and small‑ticket distressed assets. The rationale? Large‑corporate bad loans are becoming scarcer, while the market for stressed assets in India still offers a sizeable upside. By diversifying into fee‑based recovery services, ARCIL hopes to capture more of that upside without having to chase ever‑larger, riskier loans.

All eyes will be on how the market receives the IPO and whether the fee‑based model can truly unlock the next chapter of growth for the country’s first ARC.