Advik Capital Shares Ended 2% Higher On Plan To Acquire ARC Business

On Tuesday, the shares of Advik Capital ended 2.05% higher at Rs 2.49 apiece after the company have submitted Expression of Interest for acquisition of ARC (Asset Reconstruction Company) registered with the Reserve Bank of India to carry on the Business of Securitisation or Assets Reconstruction under SARFAESI Act.

Out of the 29 ARCs now in operation in India, the targeted ARC is the first in the nation to get significant backing from public sector banks and undertakings. Since the SARFAESI Act of 2002, Asset Reconstruction Companies (ARCs) have been in operation for more than ten years. ARCs are specialised companies that concentrate on comprehensive NPA resolution.

This fiscal year, ARCs' assets under management (AUM) are expected to grow by 9.8% to Rs 1.19 lakh crore, a five-year high, thanks to a few significant deals. A CRISIL team led by Mr. Krishnan Sitaraman, it's senior director and deputy chief ratings officer, stated in a paper that was recently issued at the ARC conference hosted by industry lobby ASSOCHAM that the AUM was at Rs 1.09 lakh crore in FY22 and at Rs 1.03 lakh crore in the preceding two fiscals.

Advik Capital Limited said through this acquisition it is eyeing the emerging opportunity wherein private corporate debt also going to ARCs, in addition to ARCs conventional businesses and this could be a major boost to its ARC business.

Mr. Karan Bagga, CEO of the Advik Capital said that "through the intended acquisition we are venturing into growing ARC business wherein our primary focus would be more and more on retail assets from MSMEs and NBFCs and we are sensing a grand opportunity waiting for us.

ARC business is largely dominated by few large payers so far with concentrated focus on restructuring of corporate debts, and almost negligible resolutions of private corporate debt, retail assets from MSMEs and NBFCs. Post acquisition we are aiming to do acquire these small, retail assets in most efficient and highly transparent manner and purely on commercial terms as per the provisions of the SARFAESI Act and RBI guidelines".

Advik Capital Limited, a newly established non-deposit taking Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India, is primarily involved in the provision of financial loans and related services. The company is headquartered in New Delhi.