Asset reconstruction companies (ARCs) acquired bad loans worth over Rs 2 lakh crore in FY26, with retail assets emerging as the fastest-growing segment amid a steady decline in corporate non-performing assets (NPAs).
According to industry data, total dues acquired by ARCs rose by Rs 2.05 lakh crore to Rs 18.2 lakh crore as of March. While corporate assets continued to account for the bulk of acquisitions, retail loans recorded a significantly faster growth. Retail dues acquired increased by Rs 54,727 crore, or nearly 29% year-on-year, to Rs 2.47 lakh crore, while corporate acquisitions grew by Rs 1.5 lakh crore, or around 11%, to Rs 15.7 lakh crore.
Shrinking Corporate NPAs
The trend was also reflected in issuances of security receipts (SRs) — instruments issued by ARCs to investors against acquired assets. Retail SR issuances rose 21% year-on-year to Rs 58,826 crore, compared with a 7% increase in corporate SR issuances. Data suggests that ARCs are increasingly focusing on retail assets as the pool of large corporate NPAs shrinks following years of balance-sheet clean-up by banks and insolvency resolutions.
“ARCs expect retail acquisitions to grow further this year. While gross NPAs decline, there is a continuous increase in off-balance sheet technical and prudential written off accounts. This will continue the momentum of sale to ARCs,” Hari Hara Misra, chief executive officer at Association of ARCs in India, said.
Written-Off Portfolios
The industry also reported an improvement in recoveries during the year. SR redemptions rose 16% year-on-year to Rs 2.18 lakh crore. As a result, the cumulative redemption ratio — a key measure of recovery performance — improved to 62% as of March from 58% a year earlier.
Reflecting the faster pace of recoveries, outstanding SRs declined marginally to Rs 1.33 lakh crore from Rs 1.34 lakh crore.