Arohan Financial Services – Plans ₹1,500 Crore IPO in Q2 FY27

Expert Analysis:

• NBFC-MFI Arohan Financial Services plans a ₹1,500 crore IPO in the second quarter of next financial year (Q2 FY27), split equally between ₹750 crore fresh issue and ₹750 crore offer for sale (OFS) by existing investors such as Tano Capital and the Michael and Susan Dell Foundation; promoters will not sell any stake.

• The company has appointed merchant bankers and targets DRHP filing with SEBI within the next two months, with IPO proceeds earmarked to strengthen the capital base, support portfolio growth, and reinforce management and board governance.

• Management highlights improving sector tailwinds: microfinance collection efficiency ratio (CER) has risen on the back of good harvests and GST rationalisation, with Arohan’s CER at 99.7 percent, aided by use of AI tools for collections and recoveries.

• Arohan is targeting an outstanding portfolio of about ₹7,000 crore by end of the current financial year and ₹20,000 crore by 2030, alongside a planned product diversification into secured offerings such as gold loans and loans against property to balance risk and smooth earnings.