Asset Reconstruction Company India Limited IPO

The company's revenue and profits are largely dependent on the value and composition of its AUM and any adverse change in the company's AUM may impact its revenue and profit.

Non-compliance with RBI's observations made during any inspection could expose the company is to penalties and restrictions. Any imposition of penalty or adverse findings by the RBI during any future inspections or otherwise may have an adverse effect on its reputation, business, results of operations, financial condition and cash flows.

The company bid for stressed assets through a competitive bidding process including the Swiss challenge and anchor process. If the company is unable to source and acquire a sufficient amount of stressed assets at appropriate prices,the company's growth, competitive position, financial condition and results of operations may be adversely affected.

The company's inability to recover outstanding amounts from the stressed assets the company acquire and manage in a timely manner, or at all, could adversely affect its business, results of operations, financial condition or cash flows.

A significant portion of the company's stressed assets are under its orporate loans business vertical (representing 75.48%, 78.51% and 82.70% of the company's AUM as of March 31, 2025, March 31, 2024, March 31, 2023, respectively). Any factors impacting stressed assets in the corporate loan vertical may have an adverse impact on its business, cash flows, financial condition and results of operations.

An inability to make accurate stressed asset acquisition decisions could adversely impact its business, financial condition and cash flows.

The company relies significantly on its information technology systems for its business and operations. A failures, inadequacy or security breach in the company's information technology and telecommunication systems may adversely affect its business, results of operations, financial condition and cash flows.

The company may have to comply with stricter regulations and guidelines issued by regulatory authorities in India, including the RBI, which may increase the company's compliance costs, divert the attention of its management and subject the company to penalties.

The company's Restated Consolidated Financial Information comprises the financial statements of the Company consolidated with those trusts which have been identified as subsidiaries and associates, in accordance with applicable accounting policies. The assets and liabilities of these trusts are distinct from the Company's assets and liabilities and are held for the benefit of the SR holders. Hence, investors must read its Restated Consolidated Financial Information together with the company's Restated Standalone Financial Information.

If the company fails to identify, monitor and manage risks and effectively implement its risk management policies, it could have an adverse effect on the company's business, financial condition, results of operations and cash flows.