UpcomingMainboardFinancial Services · Microfinance (NBFC-MFI)
Arohan Financial
AROHAN
Price Band: —
Min. Investment: Not disclosed (DRHP stage)
Issue Size: ₹850 Cr + OFS (total not fixed in DRHP)
About the Company
What does this company do?
Arohan Financial Services Limited is a Non-Banking Financial Company – Micro Finance Institution (NBFC-MFI) registered with the Reserve Bank of India, headquartered in Kolkata, West Bengal. The company provides microfinance loans and financial inclusion products primarily to underserved and low-income segments of the p…
IPO Details
Issue parameters, key dates and structure.
Total Issue Size
₹850 Cr + OFS (total not fixed in DRHP)
Fresh Issue
₹850 Cr
Proceeds go to company
OFS
Up to 2,70,55,893 equity shares (value not fixed in DRHP; OFS proceeds go to selling shareholders Maj Invest, MSDF, Tano India PE Fund II, TR Capital III Mauritius, and AG II)
Proceeds to selling shareholders
Products & Brands
Key offerings and brand portfolio of the company.
Microfinance Loans (NBFC-MFI): Joint liability group-based microfinance loans provided to low-income women borrowers in rural and semi-urban areas for income-generating activities, following RBI's NBFC-MFI guidelines.
Financial Performance
P&L, Balance Sheet and Cash Flow — all figures in ₹ Crores.
| Particulars (₹ Cr) | H1 FY2021 (Apr–Sep 2020) | FY2020 | FY2019 | FY2018 |
|---|
All figures in ₹ Crores (INR). Data sourced from DRHP/RHP.
Key Financial Ratios
Valuation and profitability metrics at the IPO price.
EPS (₹)
—
Not disclosed in provided DRHP excerpt
P/E Ratio
—
Price band not disclosed at DRHP stage
RoNW (%)
—
Not disclosed in provided DRHP excerpt
NAV per Share (₹)
—
Not disclosed in provided DRHP excerpt
Debt/Equity
—
Not disclosed in provided DRHP excerpt
EBITDA Margin (%)
—
Not disclosed in provided DRHP excerpt
PAT Margin (%)
—
Not disclosed in provided DRHP excerpt
Revenue Growth YoY
—
Not disclosed in provided DRHP excerpt
Objectives of the Issue
How the company intends to use the IPO proceeds.
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OFS Note: OFS proceeds from up to 2,70,55,893 equity shares will go directly to the selling shareholders (Maj Invest Financial Inclusion Fund II K/S, Michael & Susan Dell Foundation, Tano India Private Equity Fund II, TR Capital III Mauritius, and Aavishkaar Goodwell India Microfinance Development Company II Ltd) and will NOT be received by the company.
1
Fresh Issue of up to ₹850 Cr to be utilised by the Company (specific use of proceeds not detailed in provided DRHP excerpt — full objects section is on page 88 of the DRHP).
2
Pre-IPO Placement of up to ₹150 Cr may be considered prior to filing RHP; if completed, the amount will be reduced from the Fresh Issue.
SWOT Analysis
Internal strengths & weaknesses; external opportunities & threats.
💪Strengths
Established NBFC-MFI with RBI registration and regulatory compliance track record
Strong institutional investor backing and part of impact-focused Aavishkaar Group
Wide geographic reach targeting financially underserved, low-income customers
Experienced management team with deep microfinance domain expertise
⚠️Weaknesses
High dependence on external debt funding, limiting financial flexibility
Elevated credit risk due to lending to low-income, often informal-sector borrowers
Geographic concentration risk in certain states
First-time IPO with no established public market for shares, creating pricing uncertainty
🚀Opportunities
Large unbanked and underbanked population in India provides significant growth runway for microfinance
Government and regulatory support for financial inclusion initiatives
Potential to cross-sell additional financial products (insurance, savings) to existing microfinance customers
Digital transformation and fintech integration can reduce operational costs and improve reach
🔥Threats
Regulatory changes in NBFC-MFI sector including interest rate caps and lending norms
Increasing competition from banks, SFBs, and other MFIs in the microfinance space
Macroeconomic shocks (e.g., COVID-19, natural disasters) disproportionately impact low-income borrowers and repayment capacity
Political and social risks such as loan waiver campaigns or agitations against MFIs in key geographies
Competitive Strengths
Key advantages highlighted in the DRHP.
✓
Registered NBFC-MFI with a strong focus on financial inclusion for underserved and low-income segments
✓
Part of the Aavishkaar Group, providing access to a well-established impact investing ecosystem
✓
Diversified and experienced shareholder base including marquee institutional investors such as Maj Invest, Michael & Susan Dell Foundation, Tano India PE Fund II, and TR Capital
✓
Presence across multiple states with a wide distribution and branch network catering to rural and semi-urban customers
✓
Experienced management and board with deep domain expertise in microfinance and financial inclusion
✓
Track record of merger and integration capabilities demonstrated through the Intellecash merger
Promoters & Shareholding
Pre & post-IPO shareholding pattern. Click a promoter card to learn more.
Promoters
Shareholding Pattern
PrePost
Key Risks
Material risk factors to consider before applying.
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Microfinance borrowers are typically low-income individuals with limited credit history, leading to higher credit risk and potential for elevated non-performing assets
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Regulatory risks including changes in RBI guidelines for NBFC-MFIs related to interest rate caps, loan limits, or collection practices
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Dependence on external borrowings for funding, making the business sensitive to changes in interest rates and liquidity conditions
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Concentration risk given geographic focus on certain states, exposing the company to region-specific economic or political disruptions
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Operational risks related to managing a large field force and risk of fraudulent practices by employees or borrowers
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Impact of COVID-19 pandemic and similar events on collections, asset quality, and overall business operations
◆ Neutral
Should You Apply?
Arohan Financial Services Limited is a Kolkata-based NBFC-MFI focused on providing microfinance loans to low-income and underserved borrowers, backed by marquee impact investors and promoted by the Aavishkaar Group. As a DRHP filed in February 2021, key financial metrics, price band, and lot size are not yet disclosed in the available document. The fresh issue of ₹850 Cr is intended to strengthen the capital base, while the OFS of up to ~2.7 crore shares allows existing investors to partially exit. The microfinance sector offers strong long-term growth potential given India's large unbanked population, but near-term risks around COVID-19 impact on asset quality, regulatory changes, and sector-wide competitive pressures warrant caution. Investors should await the final RHP with full financial disclosures, pricing, and peer comparison before forming a definitive view.
⚠️ This is not investment advice. CheckIPO provides information for educational purposes only. Always consult a SEBI-registered financial advisor before investing.
Lead Managers & Registrar
Institutions managing the issue and handling allotment.
Book Running Lead Managers (4)
Edelweiss
ICICI Securities
Nomura
SBI Capital Markets
Registrar to the Issue
📋
Link Intime India Private Limited
Registrar to the Issue