Edelweiss ARC eyes ₹6,000 cr in recovery; invest ₹1,000 to acquire NPAs

Following RBI curbs in FY25, Edelweiss ARC plans to invest up to ₹1,000 crore in stressed assets and targets ₹6,000 crore in recoveries, led by corporate and retail

Edelweiss Asset Reconstruction is aiming for recoveries worth ₹6,000 crore in FY26 with a large share coming from corporate accounts including its stressed real estate portfolio. This comes after subdued business activity due to regulatory restrictions in FY25, The ARC recovered ₹5,730 crore in the financial year 2024-25 (FY25), of which 14 per cent came from its retail portfolio.

 

Mythili Balasubramanian, managing director (MD) and chief executive officer (CEO), Edelweiss ARC, told Business Standard it would invest up to ₹1,000 crore for acquiring the portfolio in FY26. “We will invest at least ₹400-500 crore in retail, and we will invest a similar amount in wholesale,” she said.

 

According to its FY25 and FY24 annual reports, Edelweiss ARCs’ assets under management (AUM) fell to ₹14,716.63 crore as of March 2025, from ₹31,591.72 crore in March 2024. The company acquired debt/loans portfolios with dues aggregating ₹757.56 crore in FY25, lower than ₹13,187 crore in FY24.

 

The company was unable to scale up acquisitions in the corporate segment during FY25, primarily due to regulatory restrictions imposed by the Reserve Bank of India, which directly curtailed acquisition activities. Also, market conditions further compounded this challenge, as availability of wholesale-distressed assets remained notably scarce. 

 

Balasubramanian said that new acquisitions are slow as there are few non-performing assets of scale in the banking industry. The focus continues to be on recoveries.

 

According to the Association of ARCs in India, fresh ARC business remained largely stagnant as gross non-performing assets (NPAs) in the banking system stayed below 3 per cent. Issuance of securities receipts (SRs) for acquired bad loans declined to ₹37,511 crore in FY25 from ₹37,864 crore in FY24. However, SR redemption rose to ₹43,256 crore in FY25 from ₹37,364 crore in FY24, according to the data.

 

Referring to focus on retail, she said “while retail is not able to increase AUM by leaps and bounds, it will give granularity and valuation benefit”. On a year-on-year basis, the success rate of retail recovery and return should be consistent and better. “The share of retail is about 18 per cent in AUM. It has come down because last year, we could not acquire it, "the CEO said.

 

Looking ahead, the retail division’s share of the overall portfolio is expected to increase from 18 per cent  as of March 31, 2025, to 40 per cent over the medium term, reflecting the commitment to improving portfolio diversification, cash flow certainty, and asset valuation, according to the annual report for FY25.