The microfinance sector in India is gaining momentum in 2026 following the successful listings of Aye Finance & Kissht. Kolkata-based Arohan Financial Services, the second-largest NBFC-MFI in Eastern India, has filed its DRHP with the Securities and Exchange Board of India (SEBI) for its upcoming IPO.
Arohan Financial IPO is a mix of an INR 600 crore fresh issue and an OFS of 4.04 crore equity shares. DAM Capital Advisors, Motilal Oswal Investment Advisors, and SBI Capital Markets are the book running lead managers. MUFG Intime India is appointed as the registrar of the issue.
Arohan Financial IPO: Business Overview
Arohan Financial commenced its microfinance operations in 2006. Today, it is a technology-enabled NBFC-MFI focused on providing income-generating loans to underserved women in rural and semi-urban areas. As of 31 December 2025, the company has a reach of:
- Network: 1,073 branches, with a heavy concentration (64.44% of AUM) in rural geographies.
- Presence: 17 states and 320 districts across India.
- Market Position: Ranked as the 9th largest NBFC-MFI in India with a 4.71% market share.
The company operates on the Joint Liability Group (JLG) model, offering products like the “Saral” loan for low-income female borrowers and Micro-Enterprise Loans (MEL) for small traders. Arohan has distinguished itself through a “Tech-First” approach. It was among the first in the industry to receive Aadhaar-enabled e-KYC approval and currently operates with 100% cashless disbursements. Its digital ecosystem includes proprietary apps like ‘ApnaArohan’ for customers and ‘MeraArohan’ for field staff, managing over 2.50 million transactions monthly.
Arohan Financial IPO: Financial Snapshot
| Particulars | FY 2023 | FY 2024 | FY 2025 | 9M FY 2026 |
| Total Income | 1,091.00 | 1,634.63 | 1,695.26 | 1,133.05 |
| Profit After Tax (PAT) | 70.72 | 313.82 | 109.69 | 60.74 |
| AUM | 5,357.37 | 7,112.04 | 6,002.58 | 6,308.41 |
| Gross NPA (%) | 2.86 | 1.67 | 2.85 | 1.69 |
| Basic EPS (INR) | 6.05 | 26.62 | 7.20 | 3.98 |
The company maintains a robust Capital Adequacy Ratio (CRAR) of 31.20% as of December 2025, well above the regulatory requirement of 15%, providing a strong buffer for future expansion.
Arohan Financial IPO: Use of Funds
The net proceeds from the fresh issue are primarily earmarked for:
- Augmenting Capital Base: To meet future capital requirements for onward lending and to scale the loan portfolio.
- General Corporate Purposes: Including strategic initiatives, IT infrastructure advancement, and business expansion.
Major selling shareholders in the OFS include Aavishkaar Goodwell India Microfinance Development Company-II, Tano India Private Equity Fund II, and Maj Invest Financial Inclusion Fund II K/S, among others.
Key Risks to Watch
- Regional Concentration: Approximately 69.13% of the AUM is concentrated in Eastern India (West Bengal, Bihar, Odisha, and Jharkhand).
- Regulatory Environment: The company was briefly under an RBI “Cease and Desist” order in late 2024 regarding loan disbursements, though the restrictions were lifted within 75 days following remedial actions.
- Unsecured Lending: As an MFI, the majority of the loan book is unsecured, making it sensitive to credit culture shifts or localized economic disruptions.
Bottomline: Arohan Financial Services represents a play on India’s rural financial inclusion story. While the company has shown consistent profitability and maintains superior asset quality compared to many peers, its high concentration in the Eastern belt remains a factor for investors to weigh against its strong technological edge and institutional backing from the Aavishkaar Group.
Rajat Bhati has a strong technical background and 5 years of experience in the stock market. He focuses on equity research, technical analysis, IPO valuations, and risk management, helping investors make clearer, data-backed decisions. Today, he works full-time to educate people about the opportunities in IPO market.
