Asset reconstruction companies (ARCs) have mopped up Rs 16,876 crore of stressed loans in the first quarter of the current fiscal, with retail assets dominating the list.

This was 22% higher than the Rs 13,852 crore stressed loan pool acquired in the year-ago period.

The arcs issued security receipts (SRs) worth Rs 4,388 crore in the quarter ended June 2025, which is 19.3% higher than the earlier-year figure of Rs 3,678 crore.

Retail loans acquired by the ARCs saw a three-fold jump, with the issuance in SRs increasing to Rs 1,713 crore in the June quarter, from just Rs 496 crore a year earlier.

Corporate SR issuance, on the other hand, dropped to Rs 2,675 crore in Q1FY26 from Rs 3,182 crore in the same period last year, showing shrinking space for ARCs to play in large-ticket distressed assets.

According to the data from Association of ARCs in India, the total SRs redemption stood at Rs 7,725 crore in Q1FY26, up 22% from Rs 6,310 crore a year ago.  This led to contraction of outstanding SRs, considered as assets under management (AUM), to Rs 1.31 lakh crore at end of June 2025 from Rs 1.36 lakh crore a year ago.