Stocks

Arohan Financial files initial paper for ₹1,800 cr public issue

Our Bureau Kolkata | Updated on February 15, 2021

Arohan Financial Services Ltd on Monday filed draft red herring prospectus for its proposed initial public offer (IPO). The NBFC-MFI plans to raise around ₹1,750-1,800 crore through the issue.

The public offer comprises a fund raise via fresh issuance of shares amounting to ₹850 crore. The company will also have an Offer for Sale (OFS) of 2,70,55,893 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 portion reserved for qualified institutional buyers will be up to 50 per cent of the offer, non-institutional investors will have up to 15 per cent of the portion reserved while up to 35 per cent will be reserved for the retail investors. The portion reserved for eligible employees will be up to five per cent of the offer, the company said in the DRHP.

The company may also decide to undertake a pre IPO placement of ₹150 crore subject to consultation of the merchant bankers.

The net proceeds from the fresh issue will be utilised for augmenting the company’s capital base to meet their future capital requirements which is expected to be deployed in FY-22.

Arohan, which commenced its operations in 2006, has served approximately 2.21 million borrowers across 17 States and stands as the largest NBFC-MFI in eastern India as per gross loan portfolio as on September 30, 2020. It offers a broad range of products across credit and financial instruments.

The microfinance business of the company operates out of 710 branches across 11 states and the MSME lending business has a reach across eight states through its 10 branches.

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

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Published on February 15, 2021
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