Kolkata, January 20: NBFC-MFI Arohan Financial Services is preparing to enter the capital markets in the middle of the next financial year with a proposed initial public offering of Rs 1,500 crore, according to Managing Director Manoj Kumar Nambiar.
The company has appointed merchant bankers and expects to file its draft offer document within the next two months. The IPO is planned for the second quarter of the next financial year.
Fresh Issue and Offer for Sale Details
Out of the total Rs 1,500 crore issue size, Rs 750 crore will be raised through a fresh issue of equity shares. The remaining Rs 750 crore will come through an offer for sale by existing investors, including Tano Capital and the Michael and Susan Dell Foundation.The promoters will not be selling any stake as part of the proposed offering.
Sector Momentum and Operational Performance
Nambiar said the microfinance sector has seen a positive shift over the past three to four months, supported by improved collection trends following a good harvest and GST rate rationalisation. Arohan’s collection efficiency ratio currently stands at 99.7 percent.The company is also deploying artificial intelligence tools to strengthen its collections and recovery processes.
Strategic Objectives Behind the IPO
According to Nambiar, the proposed IPO will help strengthen Arohan’s capital base and support the creation of a more efficient management structure along with stronger board governance.He also noted expectations of a potential credit guarantee scheme, which could encourage banks to increase lending to the microfinance sector.
Industry Challenges and Outlook
Nambiar highlighted the need for quicker borrower data updates by credit bureaus, stating that faster data refresh cycles would improve lending decisions across the sector.He added that while the microfinance industry has witnessed a dip in total outstanding loans and borrower count, the trend is expected to reverse in the coming quarters.
Growth Targets and Product Diversification
By the end of the current financial year, Arohan is targeting an outstanding loan portfolio of Rs 7,000 crore, with plans to scale this to Rs 20,000 crore by 2030. The company’s current net worth stands at Rs 2,100 crore.As part of its growth strategy, Arohan also plans to diversify into secured lending products, including gold loans and loans against property.
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