Arohan Financial Services Ltd IPO: Everything You Need to Know

Arohan Financial Services Limited, one of India's most prominent NBFC-MFIs (Non-Banking Financial Companies - Microfinance Institutions), is poised to debut on the Indian stock exchanges with its highly anticipated IPO. Founded in 2006 and headquartered in Kolkata, Arohan primarily caters to the under-served and financially excluded rural and semi-urban population, offering income-generating loans, microcredit, and essential financial services to women and low-income groups.

This IPO is especially significant as Arohan is among the few MFIs with a pan-East, North-East, and Central India presence, with outreach spanning 740+ districts across 20 states. The fresh capital from the IPO aims to fund future loan book growth, strengthen operational technology, and meet regulatory capital adequacy norms, reflecting strong demand for responsible, scalable financial inclusion.

The Arohan Financial Services IPO targets a ₹1,800 crore raise, inclusive of a fresh issue of ₹850 crore and an offer for sale (OFS) by current investors. This listing will broaden the company’s capital base, enhance governance standards, and deliver liquidity to longstanding shareholders.

Arohan Financial Services IPO Dates & Launch Details

• IPO opening date: To be announced
• IPO closing date: To be announced (Typically three days after opening)
• Basis of allotment: To be announced (Within 3 working days post closure)
• Refund initiation: To be announced (Shortly after basis of allotment)
• Expected listing date: To be announced (Usually within a week following allotment finalisation)

Lead Book Running Managers: Likely to be ICICI Securities, Nomura Financial Advisory, SBI Capital Markets.

Registrar: Link Intime India Pvt Ltd (tentative).

Price Band & Investment Details

• Price band: To be announced (Face value: ₹10 per share)
• Minimum lot size: To be announced
• Minimum investment: To be announced
• Maximum retail investment: To be announced

Arohan Financial Services IPO Structure

About Arohan Financial Services

Arohan Financial Services has cemented itself as a leading microfinance institution, focusing on under-served regions (Bihar, West Bengal, Assam, UP, Odisha, Chhattisgarh, Jharkhand). Its core customer base is female self-help groups and rural entrepreneurs.

Core Operations:

• Microloans: Income-generating loans, enterprise loans, emergency loans, and “Arohan Swasthya” (health microinsurance).
• Geographical Diversification: 2,355 branches across 20 states, serving 2 million active customers.
• Distribution: Digital service delivery mechanisms, direct agent networks, group lending models, and strategic alliances with local NGOs.
• Technology: Robust use of cloud-based ERP, paperless onboarding, field mobility apps for credit officers, and data-driven risk analytics.
• Credit Risk Management: Prudent underwriting, high portfolio at risk (PAR) coverage, and strong recovery protocols.

Financials 

Revenue and Profit Table

Key Highlights:

• Arohan’s operating income rebounded impressively, nearly doubling in three years from ₹901.7 crore in FY22 to ₹1,691.80 crore in FY25 as credit demand and portfolio quality improved significantly.
• After a sharp loss in FY21 due to pandemic-related provisioning, profits rose strongly, peaking at ₹313.80 crore in FY24 before stabilising at a healthy ₹109.70 crore in FY25.
• Share capital and reserves expanded in line with business scaling, and borrowings were reduced substantially in FY25, improving leverage metrics.
• The asset-light yet expansive branch footprint and digital loan origination model support high capital efficiency and rapid customer acquisition.
• Maintaining strict risk management and technology investments has protected margins and sustained growth through sectoral challenges and regulatory changes.

Sector & Market Context

India’s microfinance industry is a key enabler of financial inclusion, especially in Tier II/III towns and rural geographies. The sector has grown at a CAGR of 16-18% since FY17 and is expected to cross ₹5 lakh crore AUM by 2027. Industry reforms have strengthened underwriting norms, customer protection, and credit bureau integration.

Arohan stands out for its East-India dominance, gender-driven lending platforms, and consistent expansion in untapped markets. Competitors include CreditAccess Grameen, Ujjivan Small Finance Bank, Spandana Sphoorty, and Satin Creditcare, but Arohan’s multi-region outreach and digital delivery give it an edge.

Key Considerations for Investors

Strengths

• Market leader in Eastern and North-eastern India, with high geographical and sectoral diversification
• Solid track record of post-pandemic profit rebound and loan portfolio growth
• Advanced tech integration for efficient disbursal and collections
• High promoter commitment with no dilution in the IPO

Risks

• High exposure to rural and semi-urban borrowers may increase asset quality risks during economic slowdowns
• Vulnerable to regulatory tightening, state-level loan waivers, or cap on lending rates
• Competition, especially from new NBFCs and fintech start-ups

Opportunities

• Rapid formalisation of credit markets in Bharat (rural India)
• Expansion into MSME micro-lending, insurance, and digital products
• Leveraging analytics to reduce costs and improve underwriting outcomes

IPO Structure

• Fresh Issue: Up to ₹850 crore. These funds will be used to augment Tier-I capital, expand the loan portfolio, invest in digital operations, and meet regulatory reserve requirements.
• Offer for Sale (OFS): Up to ₹950 crore, enabling private equity and early investors (AVMS India Small Finance Fund, Tano India Private Equity Fund II, among others) to partially exit holdings.
• No shares are offered by the promoters; they retain a significant stake post-IPO, reinforcing strategic control and vision continuity.

About the Company

Arohan started as a regionally focused MFI and has become a pan-India leader in inclusive lending. With a vision to promote responsible microfinance and support economic empowerment for women, Arohan offers group and individual loans, insurance, and entrepreneurial support in India’s heartland.

Arohan’s digital platform, risk scoring, and customer education drive high operational standards, and its social impact initiatives enhance livelihood creation across states.

Conclusion

The Arohan Financial Services IPO offers investors a direct route into India’s rapidly formalising rural lending sector. The company’s profitability recovery, tech-based operations, and regional leadership stand out in a competitive market. Investors should monitor sector regulations, economic cycles, and branch productivity to assess long-term value, but Arohan emerges as a compelling opportunity in Indian inclusive finance.