Microlender Arohan files IPO; to raise Rs. 1,800 cr

Kolkata: Leading microfinance company Arohan Financial Services Ltd has filed papers with the capital market regulator SEBI for an initial public offering (IPO) and is planning to raise Rs 1,750-1,800 crore, sources said on Monday. The public offer comprises the raising of fund via a fresh issuance of shares, amounting to Rs 850 crore and an OFS (offer for sale) of 27,055,893 equity shares by a section of the existing investors, they said. Promoted by Aavishkaar Group, the company may decide to undertake a pre-IPO placement of Rs 150 crore subject to consultation of the merchant bankers.

According to the Draft Red Herring Prospectus filed with the regulator, the company may decide to undertake a pre IPO placement of Rs 150 crore subject to consultation of the merchant bankers. A portion reserved for qualified institutional buyers will be up to 50 per cent of the offer, while up to 15 per cent will be kept for non-institutional investors and up to 35 per cent for retail investors. The portion reserved for eligible employees will be up to five per cent of the offer.

"The net proceeds from the fresh issue will be utilised for augmenting the company's capital base to meet its future requirements, which is expected to be deployed in FY22," the microfinance firm said. The Kolkata-based company, which commenced its operations in 2006, claimed that it 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.

The microfinance business of the company is being operated through 710 branches across 11 states and the MSME lending covers eight states through its 10 branches. Edelweiss Financial Services Ltd, ICICI Securities Ltd, Nomura Financial Advisory and Securities (India) Private Ltd and SBI Capital Markets Ltd are the Book Running Lead Managers to the issue.