Microfinance institution Arohan Financial Services files IPO papers to raise Rs 1,750-1,800 crore

Arohan Financial, a leading NBFC-MFI with operations in financially under-penetrated low income states of India, will utilise fresh issue proceeds for augmenting the capital base to meet its future capital requirements which is expected to be deployed in FY22.

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The microfinance institution commenced its operations in 2006 and as of September last year has served approximately 22.1 lakh borrowers across 17 states and stands as the largest NBFC-MFI in Eastern India as per gross loan portfolio. It offers a broad range of products across credit and financial instruments.

Between FY17 and FY20, Arohan had the 2nd highest gross loan portfolio growth at a 68 percent CAGR among the top 5 NBFC-MFIs in India. It also had the highest customer growth at 49 percent CAGR between FY18-FY20.

As of September 2020, 76.78 percent of its microfinance portfolio was in non-urban areas of India and women constituted more than 97 percent of its total customers.

The microfinance business of the company operates out of 710 branches across 11 states, while its MSME lending business has a reach across 8 states through its 10 branches.

Its promoters, Aavishkaar Venture Management Services (AVMS) and Intellectual Capital Advisory Services (I-Cap) are part of the Aavishkaar Group. As of September 2020, the Aavishkaar Group had an AUM of approximately U$1 billion across Asia.

Its institutional investors also included Tano India Private Equity Fund II, Maj Invest Financial Inclusion Fund II K/S, Michael & Susan Dell Foundation, TR Capital III Mauritius, ASK Financial Holding and Kiran Vyapar.

Edelweiss Financial Services, ICICI Securities, Nomura Financial Advisory and Securities (India) and SBI Capital Markets are appointed as the book running lead managers to the issue.