Stocks

Arohan Financial files draft red herring prospectus

Our Bureau Mumbai | Updated on February 15, 2021 Published on February 15, 2021

The market sources peg the company’s IPO between ₹1,750-1,800 crore.

Arohan Financial Services Ltd, a Kolkata-based NBFC and microfinance institution (MFI), has filed a Draft Red Herring Prospectus for an Initial Public Offering (IPO) with the market regulator.

While the company did not disclose the amount it intends to raise through the IPO, market sources pegged it about ₹1,750-1,800 crore.

The offer comprises fresh issuance of shares amounting to ₹850 crore. The company will have an Offer for Sale (OFS) of 2.7 crore 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.

About 50 per cent of the offer would be reserved for qualified institutional buyers, 15 per cent to non-institutional investors, up to 35 per cent for retail investors and about 5 per cent for employees.

The company may also raise ₹150 crore through a pre-IPO placement.

Edelweiss Financial Services Ltd, ICICI Securities Ltd, Nomura Financial Advisory and Securities (India) Pvt Limited and SBI Capital Markets Ltd are the book-running lead managers to the issue.

The new issue’s net proceeds will be utilised for augmenting the company’s capital base to meet its future capital requirements which is expected to be deployed in FY22.

As of September 30, 2020, the company, which commenced its operations in 2006 has served about 2.21 million borrowers across 17 states and stands as the largest NBFC-MFI in Eastern India as per gross loan portfolio.

Between FY17 and FY20, as per a Crisil report, Arohan Financial Services had the second-highest gross loan portfolio growth at 68 per cent AGR and stood amongst the top five NBFC-MFIs in the country.

The company’s microfinance business operates out of 710 branches across 11 states, and the MSME lending business has a reach across eight states through its ten branches.

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Published on February 15, 2021
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