Aavishkaar-Backed Eastern India’s Second Largest NBFC Moves Forward with IPO Filing

The upcoming IPO of Arohan Financial Services, a significant player in the Indian microfinance sector, has garnered attention following its filing of the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The IPO consists of a fresh issue of ₹600 crore along with an offer for sale (OFS) of 4.04 crore equity shares. Major financial institutions, including DAM Capital Advisors, Motilal Oswal Investment Advisors, and SBI Capital Markets, are helming the book-running process. The strategic move of Arohan Financial to transition from traditional offline transactions to a tech-driven model positions it as a forward-thinking entity well-integrated within its market segment.

Arohan Financial has reported robust growth in its financials, with a projected total income of ₹1,695.26 crore for FY 2025 and a Capital Adequacy Ratio (CRAR) of 31.20% as of December 2025. This strong financial footing is critical given the potential risks, such as regional concentration, with approximately 69.13% of its assets under management located in Eastern India, and the impact of regulatory compliance within the microfinance space. As investors look cautiously at the overall economic conditions, the current grey market sentiment towards Arohan Financial is cautiously optimistic, reflecting confidence in the company’s technology-first approach and income-generating mandate focused on underserved women.

For Indian investors, the Arohan Financial IPO presents an opportunity to tap into the growing space of financial inclusion, particularly in rural and semi-urban areas. With consistent profitability, aided by strong technological capabilities, Arohan aims to expand its lending business while addressing credit culture shifts and maintaining asset quality. Investors should, however, weigh these positive aspects against the inherent risks, especially concerning regional market dependence and unsecured lending. Overall, this IPO underlines the ongoing trend of leveraging technology to enhance financial access in India, aligning with the broader economic initiatives aimed at uplifting underrepresented demographics.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova IPO team.)