ARCIL IPO: Avenue Capital, SBI, Federal Bank To Sell Shares Via OFS In Asset Reconstruction Company

Asset Reconstruction Company (India) Ltd. has filed a draft red herring prospectus with the Securities Exchange Board of India for an initial public offering. The IPO consists of 10.5 crore shares, all of which are offered for sale with no fresh issue. The face value of each equity share is Rs 10.

US investment firm Avenue Capital and State Bank of India are the promoters selling their shares via IPO. Lathe Investment Pte. Ltd and Federal Bank Ltd. are other selling shareholders.

Avenue Capital affiliate Avenue India Resurgence is selling over 6.8 crore equity shares with an acquisition cost of Rs 55.62 per share. SBI has offered up to 1.9 crore equity shares with an acquisition cost of Rs 36.76 per share.

Since the IPO is a complete offer for sale, proceeds will not go to the company.

Asset Reconstruction Company will be listed on the BSE and the National Stock Exchange.

Details regarding price band, IPO period, allotment date and listing date will be disclosed after SEBI approval for the offer documents. The company will file a public advertisement with these details.

Book running lead managers for the ARCIL IPO are IIFL Capital Ltd., IDBI Capital Ltd., and JM Financial Ltd.

Asset Reconstruction Company was incorporated as a public limited company on Feb. 11, 2002. The firm commenced business on Aug. 29, 2003, following registration with the Reserve Bank of India.

The company functions in the asset reconstruction segment and has operations spanning across India. The firm is primarily engaged in the business of acquiring stressed assets from banks and financial institutions and implements resolution strategies through restructuring, enforcement of rights on underlying securities, and settlement aimed at maximising recovery and optimising the value of such stressed assets in order to generate revenue streams.

The firm's total asset under management stands at Rs 16,852 crore as of FY25.

Avenue India Resurgence has a controlling stake of 69.73%, followed by SBI with 19.95% stake, Lathe Investment with 5% stake, and Federal Bank with 1.27% stake, as per the pre-IPO pattern disclosed in the DRHP.