Up to 290% gains! SBI, Federal Bank make massive windfall as Arcil’s Rs 733-crore IPO hits D-Street

Public lender State Bank of India and private lender Federal Bank are sitting on massive gains of 281% and 292%, respectively, on their investments in Asset Reconstruction Company (India) Ltd, or Arcil, as the company prepares to launch its Rs 733-crore Offer for Sale IPO.

Federal Bank had acquired 7,00,116 shares in Arcil at an average price of Rs 35.43 per share, taking its total acquisition cost to Rs 2.48 crore. With the lender now set to sell its stake at the upper end of the IPO price band at Rs 139 per share, the holding is valued at Rs 9.74 crore, translating into a gain of 292%.

For SBI, the returns are even more substantial in absolute terms. Arcil’s red herring prospectus shows that the country’s largest lender invested Rs 40 crore in the company. That investment has now grown to Rs 152.39 crore, representing a massive 281% gain.


Avenue India Resurgence and State Bank of India hold 69.73% and 19.95%, respectively, in Arcil. Among public shareholders, Singapore's sovereign wealth fund GIC-backed Lathe Investment owns a 5% stake, while Karnataka Bank holds 2.64%. South Indian Bank and Federal Bank each hold a 1.27% stake in the company.

Arcil IPO details

Arcil’s IPO will open for subscription on September 9 and close on September 11, with bidding for anchor investors scheduled for September 8, according to a public announcement issued by the asset reconstruction company.

The issue comprises an Offer for Sale (OFS) of 5.27 crore equity shares. Promoters Avenue India Resurgence Pte Ltd and State Bank of India, along with existing shareholders Lathe Investment Pte Ltd and The Federal Bank Ltd, will participate in the offer by selling their shares.

As the IPO is entirely an OFS, Arcil itself will not receive any proceeds from the issue. The entire amount raised will accrue to the selling shareholders. At the upper end of the price band, the issue size is estimated at around Rs 733 crore, while it stands at about Rs 696 crore at the lower end.

The IPO size has been cut by half from the 10.54 crore shares proposed under the OFS when Arcil filed its DRHP in August 2025. The issue subsequently received SEBI approval in October 2025.

Of the total offer size, 50% has been reserved for qualified institutional buyers, while retail investors have been allocated 35% and non-institutional investors the remaining 15%.

Arcil IPO financials

Arcil was the first asset reconstruction company to be incorporated in India and received a certificate of registration from the Reserve Bank of India to commence operations in August 2003. As of FY25, the company said it was the second-largest ARC in India by assets under management, with an AUM of Rs 16,852.6 crore.

The company’s profit for the year ended March 2026 rose 6.7% to Rs 351.7 crore from Rs 329.5 crore a year earlier. Revenue during the period increased 24% to Rs 721.7 crore from Rs 581.8 crore.

Arcil operates in a highly complex industry, bidding for stressed assets through competitive processes including the Swiss challenge and anchor process. Its inability to recover outstanding amounts from stressed assets acquired and managed in a timely manner, or at all, could adversely affect its business, results of operations, financial condition or cash flows.

Asset Reconstruction Company (India) Ltd (Arcil) is engaged in the acquisition and resolution of stressed assets, primarily sourced from banks and financial institutions. The company seeks to recover value from distressed loans through a combination of resolution, restructuring, enforcement, settlement and collection strategies.

Established in 2003, Arcil received its registration from the Reserve Bank of India (RBI) in August that year to undertake securitisation and asset reconstruction activities. It is recognised as the first asset reconstruction company to be incorporated in India.

Arcil's business is spread across three segments: Corporate Loans, SME and Other Loans, and Retail Loans. Its portfolio comprises both individual and pooled stressed assets, covering secured as well as unsecured exposures.

Depending on the characteristics of each asset, the company adopts different recovery and resolution mechanisms aimed at maximising recoveries and enhancing asset value. Its income is primarily derived from fees and investments.

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