ARC India acquisitions nearly triple as FY26 recoveries fall

Asset Reconstruction Company (India) Limited, referred to here as ARC India, nearly tripled annual stressed-asset acquisitions to Rs 5,958.8 crore in FY26 from Rs 2,068.982 crore in FY24. Its own investment in security receipts also increased, but annual recoveries fell to Rs 3,444.391 crore from Rs 3,882.655 crore in FY25.

Why did ARC India’s acquisitions nearly triple in two years?

ARC India’s annual acquisitions nearly tripled because purchase consideration for stressed assets rose by 188% between FY24 and FY26. Total acquisition reached Rs 5,958.8 crore in FY26, compared with Rs 3,975.871 crore in FY25 and Rs 2,068.982 crore in FY24. The FY26 total was 49.9% higher than FY25 and Rs 3,889.818 crore above FY24.

ARC India defines total acquisition as the total purchase consideration paid for stressed assets in a year. The value is equivalent to security receipts, or SRs, issued by trusts managed by ARC India during that year. An SR is an instrument issued by an asset reconstruction company to a qualified buyer, evidencing an undivided right, title or interest in the acquired financial asset.

ARC India increased its investment in SRs issued for annual acquisitions to Rs 2,023.046 crore in FY26 from Rs 944.968 crore in FY24, an increase of 114%. However, its share of annual acquisitions was 33.95% in FY26, below 45.67% in FY24, though above 32.23% in FY25. That distinction means ARC India supplied a larger absolute amount in FY26 without funding as large a proportion of acquisitions as it did two years earlier.

The KPI data also show an unusual movement in cumulative SR issuance. Total acquisition or cumulative SRs issued was Rs 4,411.443 crore at March 31, 2026, compared with Rs 3,815.563 crore at March 31, 2025 and Rs 4,417.916 crore at March 31, 2024. ARC India reports the figures as disclosed and does not explain why the FY25 cumulative value was below the FY24 figure.

Why did ARC India’s FY26 recoveries fall?

ARC India’s annual recoveries fell because collections from borrowers against managed assets were Rs 3,444.391 crore in FY26, down Rs 438.264 crore, or 11.3%, from Rs 3,882.655 crore in FY25. FY26 recoveries were also below the Rs 3,678.146 crore reported in FY24. Collection or recovery measures amounts collected or recovered from borrowers during the year against assets under management.

The disclosure does not identify a specific portfolio, borrower category or resolution method behind the FY26 decline. ARC India says its resolution methods include proceedings under the Insolvency and Bankruptcy Code, negotiated settlements, debt restructuring or rescheduling, and asset sales under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, or SARFAESI Act, and through Debt Recovery Tribunals. The recovery figure is therefore an annual collection measure across managed assets, rather than a direct outcome for assets acquired in FY26.

The managed asset pool expanded despite the lower annual recovery. Total assets under management, or AUM, rose to Rs 20,149.987 crore at March 31, 2026 from Rs 16,852.570 crore a year earlier and Rs 15,230.031 crore at March 31, 2024. ARC India defines AUM as SRs outstanding across all trusts it manages at the end of a fiscal year, so future recoveries depend on resolutions across a larger outstanding pool.

How much more capital did ARC India put into managed assets?

ARC India’s outstanding investment in total AUM increased to Rs 4,408.589 crore at March 31, 2026, from Rs 3,298.301 crore in FY25 and Rs 2,763.387 crore in FY24. Its share of total AUM consequently rose to 21.88% in FY26 from 19.57% in FY25 and 18.14% in FY24. This measure captures ARC India’s exposure to all outstanding managed trusts at year-end.

The AUM measure differs from ARC India’s share of annual acquisitions. The 33.95% annual-acquisition share in FY26 describes ARC India’s investment in SRs issued for that year’s purchases, while the 21.88% AUM share measures its outstanding investment across the entire managed base on March 31, 2026. The AUM share increased by 3.74 percentage points from FY24, indicating that ARC India’s investment rose faster than total AUM over the two-year period.

ARC India reported standalone net worth of Rs 2,955.214 crore in FY26, up from Rs 2,663.140 crore in FY25. Net owned funds, which adjust net worth for impairment, fair-value losses and intangible assets, were Rs 2,576.872 crore in FY26. The debt-to-equity ratio increased to 0.41 times from 0.11 times in FY25, while the capital-to-risk-weighted-assets ratio, or CRAR, declined to 65.31% from 88.41%.

What do SR redemptions and financial KPIs show?

ARC India’s annual SR redemptions increased to Rs 2,638.117 crore in FY26 from Rs 2,223.311 crore in FY25, but remained below Rs 2,953.471 crore in FY24. Cumulative SR redemption reached Rs 22,400.027 crore at March 31, 2026, compared with Rs 19,761.910 crore a year earlier. The cumulative SR redemption ratio was 50.78% in FY26, compared with 51.79% in FY25 and 51.31% in FY24.

The cumulative SR redemption ratio is cumulative SRs redeemed divided by cumulative SRs issued at the end of the relevant year. Its 1.01-percentage-point decline from FY25 indicates that cumulative redemptions grew less quickly than cumulative SR issuance on ARC India’s reported measure. The ratio should be read alongside the inconsistent cumulative issuance figures reported for FY24 and FY25, for which the disclosure gives no explanation.

Standalone revenue from operations rose to Rs 721.092 crore in FY26 from Rs 581.757 crore in FY25, while standalone profit after tax increased to Rs 351.688 crore from Rs 329.508 crore. Revenue from operations can include fees, other operating income, investment income, write-backs, fair-value gains and interest income. It is therefore broader than borrower collections and does not move solely with annual recoveries.

ARC India describes the KPIs as supplemental measures that are not substitutes for restated financial information prepared under Indian Accounting Standards, or Ind AS. Its audit committee approved the disclosed KPI set on September 1, 2026, and J. Kala & Associates, Chartered Accountants certified the metrics on the same date. ARC India also disclosed no additions or dispositions of assets or businesses in FY24, FY25 or FY26.

Conclusion

ARC India’s FY26 data show that acquisition growth, capital exposure and collections did not move in the same direction. Annual acquisitions rose by Rs 3,889.818 crore between FY24 and FY26, while ARC India’s outstanding AUM investment increased by Rs 1,645.202 crore and total AUM grew by Rs 4,919.956 crore. Yet FY26 recoveries were below both FY25 and FY24, and the cumulative SR redemption ratio declined from the preceding year.

The next measures to watch are ARC India’s periodic KPI disclosures, which it says it will provide at least annually for at least the later of one year after listing or the period specified by the Securities and Exchange Board of India. The unresolved issue is whether recoveries and SR redemptions rise as ARC India works through the Rs 20,149.987 crore FY26 AUM using its disclosed resolution methods.