Authum Investment strengthens Capital Base of Asset Reconstruction Subsidiary

Authum Investment and Infrastructure has committed ₹1,016.3 million to subscribe to a rights issue by its subsidiary, India SME Asset Reconstruction Company, strengthening the distress debt firm's capital base for expanded operational capacity.

Authum Investment and Infrastructure has approved a capital infusion of ₹1,016.3 million into its subsidiary, India SME Asset Reconstruction Company (ISARC), by subscribing to a 2:1 rights issue. Under the structure of the offering, the company will acquire 406.5 million equity shares at a price of ₹10 per share. An initial application payment representing 25 percent of the issue price equivalent to ₹2.50 per share and totaling ₹1,016.3 million was completed, with subsequent cash calls to be fulfilled upon notices issued by the target company.

Registered with the Reserve Bank of India since April 2008, ISARC operates as a specialized non-performing asset resolution and securitization entity. Authum established majority control over the business in June 2025 via secondary market share transfers and fresh equity issuances, currently holding an 88.37 percent stake comprising 203.3 million shares. The target company reported a net worth of ₹3,532.9 million alongside annual revenue of ₹174.2 million for the fiscal year ended March 31, 2026.

This corporate capital deployment directly aligns with regulatory capital adequacy requirements mandated for asset reconstruction companies operating in India. By reinforcing ISARC's equity structure, the parent company enables broader capacity for acquiring non-performing loan portfolios from commercial banking entities, supporting systemic balance sheet cleanup across the financial services sector.

For institutional investors and distress-debt market participants, the capital commitment signals ongoing recapitalization and consolidation within India's bad bank landscape. Higher capital reserves enhance ISARC's competitive posture in bidding for larger corporate and small enterprise non-performing asset portfolios, providing valuable debt resolution avenues for primary lenders.