Arohan Financial Services Files DRHP For ₹600 Crore IPO

Microfinance institution Arohan Financial Services has filed draft papers with market regulator the Securities and Exchange Board of India (SEBI) to raise ₹600 crore through a fresh issue of shares as part of its initial public offering (IPO).

The proposed IPO will also include an offer for sale (OFS) of 4.04 crore equity shares by existing shareholders, according to the draft red herring prospectus (DRHP) filed.

Investors Planning To Offload Shares

Several existing investors plan to pare stakes through the offer for sale. These include:

• US Teachers Insurance and Annuity Association

• Michael & Susan Dell Foundation

• Aavishkaar Goodwell India Microfinance Development Company-II Ltd

• Tano Capital

• TR Capital III Mauritius

• Danish Sustainable Development Goals Investment Fund

The company said proceeds from the fresh issue will be used to strengthen its capital base and support future lending operations. A portion will also be used for general corporate purposes. DAM Capital Advisors, Motilal Oswal Investment Advisors and SBI Capital Markets are the book-running lead managers to the issue.

Expansion Across Rural And Semi-Urban Markets

Arohan Financial Services operates as a technology-enabled non-banking financial company-microfinance institution (NBFC-MFI). The company offers income-generating loans along with financial and non-financial products, mainly to customers in rural and semi-urban markets.

The Kolkata-headquartered lender started operations in 2006 from a single branch in the city. Over the years, it has expanded its presence across multiple states. As of December 2025, the company operated 1,073 branches spread across 17 states. Its assets under management stood at ₹6,308 crore during the same period.

The company has built its business around small-ticket loans targeted at underserved borrowers, a segment that continues to see demand despite tighter regulatory oversight in the microfinance sector.

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IPO Plans Announced Earlier This Year

Arohan Financial Services Managing Director Manoj Kumar Nambiar had said in January that the company was looking to raise around ₹1,500 crore through its maiden public issue.

The IPO market has seen increased activity from financial services companies in recent months as firms look to raise growth capital and improve balance sheet strength amid improving market conditions.

Sources:

The Economic Times

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