Arohan Financial Services is advancing plans to enter the capital markets, with preparations underway to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) by the end of the month. The proposed initial public offering (IPO) is expected to strengthen the company’s capital base and support its next phase of growth.
IPO Roadmap and Listing Outlook
The company is in the final stages of DRHP preparation and will proceed with the filing shortly. Post submission, it will engage with regulatory review processes before progressing toward listing. Management has indicated that market conditions in the upcoming financial year could be more conducive for the IPO launch.
AUM Growth and Operational Focus
Arohan is targeting a steady expansion in its assets under management (AUM):
- ₹7,000 crore by the end of FY26
- ₹9,000 crore by FY27
Over the long term, the company aims to build a ₹20,000 crore portfolio by 2030. Growth is expected to be driven by improved productivity across its existing branch network rather than aggressive geographic expansion.
Currently, the lender operates across 17 states with nearly 1,000 branches, focusing on optimising operational efficiency and deepening market penetration.
Market Presence and Geographic Expansion
West Bengal remains the largest contributor to Arohan’s loan book, accounting for approximately 27–28%, followed by Bihar and Assam.
The company has also expanded into newer markets such as Gujarat, Maharashtra, Tamil Nadu, and Karnataka, broadening its national footprint.
Diversification into Secured Lending
In line with evolving regulatory flexibility from the Reserve Bank of India, Arohan is exploring diversification beyond its core microfinance operations.
The company is evaluating entry into secured lending segments, including:
- Gold loans
- Loans against property
- Vehicle and two-wheeler financing
The strategy is to leverage its existing distribution network and customer base, minimising the need for additional infrastructure.
Funding Strategy and External Borrowings
To support growth, Arohan is also exploring diversified funding avenues. The company is in discussions with global development finance institutions such as BlueOrchard and FMO, alongside existing lenders.
It is also evaluating overseas borrowing options in addition to domestic instruments like non-convertible debentures (NCDs), with a focus on optimising cost of funds and tenure.
Summary
Arohan Financial Services is preparing for an IPO with plans to file its DRHP soon, aiming to strengthen capital and support expansion. The company is targeting AUM growth to ₹9,000 crore by FY27 and ₹20,000 crore by 2030, while also diversifying into secured lending segments. Alongside operational optimisation, it is exploring both domestic and international funding sources to fuel long-term growth.
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