IPO Alert: Aavishkaar Group-promoted Arohan Financial files for IPO to raise Rs 1,800 crore

Kolkata-based Arohan Financial has filed IPO (initial public offering) DRHP. It is estimated that the NBFC-MFI company is expected to raise Rs 1,750-1,800 crore through this IPO.

The Company will have an Offer for Sale (OFS) of 27,055,893 equity shares by Maj Invest Financial Inclusion Fund II K/S, Michael & Susan Dell Foundation, Tano India Private Equity Fund II, TR Capital III Mauritius and Aavishkaar Goodwell India Microfinance Development Company II Ltd; collectively. The company will raise Rs 850 crore via fresh issuance of shares.

The funds from the IPO will be utilised to amplify the company’s capital base to meet their future capital requirements which is expected to be deployed in FY22 .

The portion reserved for Qualified Institutional Buyers will be upto 50 per cent of the offer, Non-Institutional Investors will have upto 15 per cent of the portion reserved while upto 35 per cent will be reserved for the retail investors. The portion reserved for eligible employees will be upto 5 per cent of the offer.

The financial institution may decide to undertake a pre IPO placement of Rs 150 crore subject to consultation of the merchant banker.

Since its operations in 2006, the company served approximately 2.21 million borrowers across 17 states and stands as the largest NBFC-MFI in Eastern India (as on September 2020). It has around 720 branches across 17 states.

As of September 30, 2020, its gross NPA was 2.43 per cent while our net NPA was 0.00 per cent. Arohan Financial also had the highest customer growth at 49 per cent CAGR between FY18-FY20. The company’s disbursements, AUM, Total Comprehensive income has been growing YOY and as on FY20 stood at a CAGR of 110.03 per cent.

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