Arohan Financial Services IPO

About Arohan Financial Services IPO

The Arohan Financial Services IPO opens on TBA and closes on TBA. The allotment of shares will take place on TBA. The credit of shares to the demat account will take place on TBA. The initiation of refunds will take place on TBA. The listing of shares will take place on TBA.

The offer consists of both a fresh issue and an offer for sale component. The fresh issue will include [TBA] shares aggregating up to ₹600 crores. The offer for sale portion includes 4,04,37,529 shares of ₹10 aggregating up to ₹[TBA] crores. The total number of shares and aggregate amount are yet to be finalised.

Arohan Financial Services IPO’s price band is set at TBA to TBA per share. The lot size for an application is TBA. The minimum amount of investment required by a retail investor is ₹TBA (TBA shares) (based on upper price). The minimum lot size investment for HNI is TBA. The Arohan Financial Services IPO will be listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) upon completion of the offer, making it a mainboard listing on both major Indian stock exchanges.

Arohan Financial Services is a technology-enabled non-banking financial company – microfinance institution (“NBFC-MFI”) offering income-generating loans and a suite of financial and non-financial products to underserved and unserved customers primarily across rural and semi-urban states in India with limited or no access to formal financial services.

The company may, in consultation with the BRLMs, consider a Pre-IPO Placement of up to ₹120 crores prior to filing the Red Herring Prospectus. If undertaken, the amount raised would be deducted from the Fresh Issue size.

Objectives of Arohan Financial Services IPO

• Augmenting their capital base to meet future business requirements of the company towards onward lending.
  
• General corporate purposes.
  

Industry Outlook

The Indian microfinance industry plays a critical role in extending formal financial services to underserved and unbanked populations, particularly in rural and semi-urban areas. The key participants in the microfinance ecosystem include Microfinance Institutions (MFIs), NBFC-MFIs, Scheduled Commercial Banks, and Small Finance Banks (SFBs). NBFC-MFIs account for 22.52% of the industry GLP as of Dec’25, indicating that while the NBFC-MFIs represent a significant component of credit delivery to underserved areas, a substantial portion of the market continues to be serviced by other lenders, suggesting scope for incremental growth for NBFC‑MFIs. While challenges such as funding costs, regional concentration risks, and asset quality remain, the industry’s resilience and ability to adapt have kept it central to India’s financial ecosystem. Microfinance continues to play a vital role in empowering women, boosting rural economies, and bridging the gap between formal credit and underserved communities.

About Arohan Financial Services

Arohan Financial Services is a technology-enabled non-banking financial company – microfinance institution (“NBFC-MFI”) offering income-generating loans and a suite of financial and non-financial products to underserved and unserved customers primarily across rural and semi-urban states in India with limited or no access to formal financial services. They aim to support broader financial inclusion and facilitate economic participation of women borrowers through access to credit.

Their operations are focused on customer centricity, supported by a range of income-generating and financially inclusive offerings aimed at meeting the diverse needs of financially underserved and unserved customers. Their product portfolio comprises core microfinance products, including the Saral loan and micro-enterprise loans (“MEL”), as well as certain secondary, cross-sell products offered exclusively to their core loan product customers to address their requirements for both financial and non-financial products. These products support livelihood enhancement, working-capital requirements and essential household needs.

Strengths of Arohan Financial Services

• Second largest NBFC-MFI in Eastern India (based on the presence of corporate offices) among Peer NBFCMFIs in terms of AUM with a focus on Under-Penetrated Rural and Semi-Urban Areas.
• Customer centric approach with diverse product offerings.
• Advanced and scalable AI-enabled technology infrastructure.
• Proprietary credit scoring model driving underwriting discipline and risk based pricing. - Diversified borrowing relationships and access to multiple sources of capital.
• Institutional promoter ownership and experienced board and senior management team.

Risks of Arohan Financial Services

• The Reserve Bank of India had directed the company to cease and desist from sanction or disbursal of loans from October 21, 2024 which was lifted on January 3, 2025. Any such directive in the future can affect the business.
• If they are unable to control the level of non-performing assets in the future, or if they are unable to maintain adequate provisioning coverage, or if there is any change in regulatorily mandated provisioning requirements.
• Their business requires funds regularly, and any disruption in their funding sources could have an adverse effect on their business.
• As a non-banking financial company, non-compliance with the Reserve Bank of India’s observations made during its periodic inspections could expose them to penalties and restrictions.
• Their financial performance is vulnerable to interest rate risk, and an inability to manage their interest rate risk could impact their net interest income and adversely affect their business.
• They have incurred indebtedness and an inability to comply with existing and future repayments and other covenants in their financing agreements could adversely affect their business.
• If they are unable to maintain their collection efficiencies or control the level of non-recovery of loans.
• They have had negative net cash flows from operating activities in the past and may continue to have negative cash flows in the future.

Note: NM means non-meaningful (Companies with negative PE)

Source: Annual report of the peer companies for the Financial Year 2025 submitted to stock exchanges.

Notes: 1. All the financial information for listed industry peers mentioned above is on a consolidated basis.

2. P/E ratio is calculated as closing share price as on May 08, 2026, divided by the diluted EPS for the year ended March 31, 2025.

3. Diluted EPS refers to the diluted EPS sourced from the financial statements of the respective peer group companies for the Financial Year ended March 31, 2025.

4. NAV per Equity Share represents total equity attributable to the equity shareholders as at the end of the Financial Year ended March 31, 2025 divided by the number of diluted Equity Shares (i.e., equity shares and instruments entirely equity in nature) outstanding at the end of the year.

5. RoNW is computed as consolidated profit after tax for the period/years as a percentage of closing Net Worth of the Financial Year.

Anchor Investor Bidding Date: TBA

Registrar: MUFG Intime India Private Limited (Formerly Link Intime India Private Limited) is a SEBI-registered registrar and share transfer agent (SEBI Registration No. INR000004058) headquartered in Mumbai, Maharashtra. They handle IPO processing, share allotment, refund initiation, demat credit services, and investor grievance redressal for this offer. Investors may reach them at arohanfinancial.ipo@in.mpms.mufg.com or +91 810 811 4949.

Book Running Lead Managers
:

• DAM Capital Advisors Limited
  
• Motilal Oswal Investment Advisors Limited
  
• SBI Capital Markets Limited
  

Arohan Financial Services Business Model

The company earns its revenue as a technology-enabled non-banking financial company – microfinance institution (“NBFC-MFI”) offering income-generating loans and a suite of financial and non-financial products to underserved and unserved customers primarily across rural and semi-urban states in India with limited or no access to formal financial services.

Arohan Financial Services Growth Trajectory

Arohan Financial Services’s Total Income for FY25 was ₹1695.262 crores, whereas in FY24 and FY23 it was ₹1634.634 crores and ₹1090.996 crores, respectively.

The Profit After Tax for FY25 was ₹109.686 crores, whereas in FY24 and FY23 it was ₹313.821 crores and ₹70.716 crores, respectively.

Their EBITDA for FY25 was ₹776.897 crores, whereas in FY24 and FY23 it was ₹1010.349 crores and ₹563.362 crores, respectively.

Arohan Financial Services Market Position

Arohan Financial Services is the ninth largest NBFC-MFI in India in terms of AUM with a market share of 4.71%, placing them among the leading participants in the micro finance industry. (Source: CARE Report) Based on gross non-performing assets (“Gross NPAs”) and net non-performing assets (“Net NPAs”), they have delivered one of the strongest asset-quality performances among Peer NBFC-MFIs* , with their Gross NPAs to gross loans (“Gross NPAs/ Gross Loans”) of 1.69%, being the second lowest among Peer NBFC-MFIs, while their Net NPAs to Gross Loans (“Net NPAs/ Gross Loans”) was 0.39%, the third lowest among Peer NBFC-MFIs, each as of December 31, 2025. (Source: CARE Report)

As of December 31, 2025, they have 1.95 million active customers (“Active Customers” are defined as borrowers who had an active loan account as of the last day of the relevant period/years) of which 76.82% are located in non-urban (rural and semi-urban) geographies across 17 states in India.

As of 31 March 2025, the company’s Total Income, Profit After Tax, and EBITDA were ₹1695.262 crores, ₹109.686 crores, and ₹776.897 crores, respectively.

How to apply for Arohan Financial Services IPO?

• Step 1: Log in to your Kotak Neo Demat account to access IPO investments. Next, select the current IPO section.
• Step 2: Specify IPO details. Enter the number of lots and the price you wish to apply for.
• Step 3: Enter UPI ID. After entering your UPI ID, click submit. This will place your bid with the exchange.
• Step 4: Mandate Notification. Your UPI app will receive a mandate notification to block funds.
• Step 5: Approve Request. Your funds will be blocked once you approve the mandate request on your UPI.