ARCIL

IPO Size: Rs. 733 cr, Entirely Offer for Sale (OFS)

• 47% OFS by promoter Avenue Capital (70% holding to reduce to 62%, part exiting at 13% IRR in 7.5 years)
• 21% OFS by promoter SBI (20% stake to reduce to 17%, at 6% IRR in 23 years)
• 31% OFS by Singapore’s GIC (Lathe), completely exiting 5% stake at petty 3% IRR in 18 years  
• 1% OFS by Federal Bank (1.3% stake to shrink to 1.1% post IPO)

Price band: Rs. 132-139 per share

M cap: Rs. 4,516 cr (IPO is 16% of m cap)

IPO Date: Wed 9^th Sep to Fri 11^th Sep 2026, Listing Thu 17^th Sep 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

India’s 1^st Asset Reconstruction Company

Asset Reconstruction Company of India Limited (ARCIL) is a 23 year old company engaged in the business of acquiring stressed assets from banks/ financial institutions and implementing resolution through restructuring, rights enforcement and settlement, with assets under management (AUM) of Rs. 20,150 cr, as of 31.3.26.

 

Weak Financials  

While consolidated total income has risen from Rs. 609 cr in FY24 to Rs. 750 cr in FY26, net profit has been more or less stagnant in the past 3 years, from Rs. 311 cr in FY24 to Rs. 323 cr in FY26. As a result, consolidated RoE has slipped from 14.2% in FY24 to 12.5% in FY26.

Stock market investors have witnessed close to 13% return in Nifty, over the long term. Company’s RoE being is lower than that implies imprudent use of capital.

 

Inline Pricing

M cap of Rs. 4,516 cr leads to a historic PE multiple of 12.8x on FY26 consolidated EPS of Rs. 10.8. The lumpy nature of earnings makes estimating FY27E earnings difficult. This is also the reason why PE multiple for the stock will always be low.

In addition, the 100% OFS issue is giving poor returns to the selling shareholders, even after holding over a long period of time. This is weigh-in on the minds of IPO investors.