Aavishkaar-backed MFI aims to file DRHP by March; FY25 profit at ₹110 crore after RBI curbs lifted
Arohan Financial Services is preparing a public offer of about INR 1,500 crore in 2026 and is working towards filing a DRHP by March, according to a report and people aware of the matter. The Kolkata-based non-bank microfinance lender is exploring a mix of fresh equity and an offer for sale, with a near 50:50 split indicated in the report.
Arohan Financial IPO Timeline & Size
The plan follows Aavishkaar Group founder Vineet Rai’s comment on 15 December 2025 that Arohan could launch its IPO within 12–15 months, implying a potential window between late-2026 and early-2027, subject to market conditions and regulatory clearances. In that interaction, he underlined the company’s readiness to return to the public markets after earlier postponements.
Arohan had previously filed a DRHP in early 2021 for an IPO then pegged at INR 1,750–1,800 crore, comprising a fresh issue and a secondary sale by existing shareholders. The proposal was shelved amid market volatility, with the company later tapping private investors to shore up capital.
Regulatory Backdrop & Safeguards
The Reserve Bank of India (RBI) lifted lending restrictions on Arohan on 3 January 2025, allowing it to resume disbursements after the company overhauled processes and committed to fair pricing. The central bank had barred four NBFCs, including Arohan, from fresh lending in October 2024 over concerns ranging from usurious pricing to gaps in borrower income assessment.
In the wake of the curbs, Arohan’s board adopted internal guardrails on growth and pricing. “A self‑imposed margin cap of 12% over cost of funds and a maximum 25% annual growth” will apply, managing director Manoj Kumar Nambiar said in the company’s newsletter, adding that these measures are intended to strengthen underwriting discipline.
Financial Performance & Scale
For FY25, Arohan reported total revenue of INR 1,581 crore and a net profit of INR 110 crore, as per a December update. Asset quality softened: gross NPA rose to 2.77% from 1.64% in FY24, while net NPA moved to 0.47% from nil. Management has guided for a steady normalisation as operating conditions stabilise.
The company’s latest annual report highlights a network of 1,102 branches across 17 states, serving about 2.1 million borrowers with an outstanding credit portfolio of over INR 6,000 crore as of March 2025; it also reported a capital adequacy ratio of 34.09%. The scale, management said, reflects both geographic diversification and tighter risk oversight after the regulatory episode.
Background & Next Steps
Market participants say the renewed efforts for Arohan Financial IPO, will likely prioritise growth capital to support loan expansion and strengthen the balance sheet. The secondary component could provide liquidity for some legacy investors. A final size, structure and price band will be determined closer to filing and post feedback from regulators and bankers.
Analysts note that microfinance valuations will hinge on funding costs, rural cashflows and regulatory clarity through FY26. The RBI, in lifting curbs last year, said it did so after being “satisfied” with the company’s revamped systems and its commitment to fair pricing—language that underscores both opportunity and scrutiny for upcoming issuers in the segment.
Arohan Financial IPO Highlights
- Arohan Financial IPO size: about INR 1,500 crore; filing targeted by March 2026.
- Timeline: Late‑2026 or early‑2027 launch window.
- Structure: Likely mix of fresh issue and OFS; recent reports point to near 50:50.
- FY25 performance: revenue INR 1,581 crore; net profit INR 110 crore; GNPA 2.77% (up 113 bps YoY); NNPA 0.47%.
- Network and scale: 1,102 branches in 17 states; ~2.1 million borrowers; loan book >INR 6,000 crore (Mar 2025).
- Regulatory status: RBI lifted lending curbs on 3 Jan 2025 after process changes and pricing commitments.
- Legacy plan: earlier DRHP in 2021 targeted INR 1,750–1,800 crore; later deferred amid volatility.
Conclusion
Arohan’s renewed push to list—coming a year after the RBI lifted lending curbs—signals confidence in both its refreshed governance framework and sector demand. Execution will depend on sustained asset‑quality discipline, stable funding costs and the broader window for financials through FY26–27.
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