Arohan Financial to Raise ₹1,500 Cr via IPO in Mid 2026-27

Arohan Financial Services, a leading NBFC-MFI, is planning to enter the capital market with an IPO of ₹1,500 crore in the second quarter of the next financial year, managing director Manoj Kumar Nambiar said.

The company has already appointed merchant bankers and aims to file its Draft Red Herring Prospectus (DRHP) with SEBI in the next two months. Out of the total IPO amount, ₹750 crore will come from fresh shares, while the remaining ₹750 crore will be offered for sale (OFS) by existing investors, including Tano Capital and the Michael & Susan Dell Foundation.

Nambiar highlighted that the microfinance (MFI) sector is witnessing positive momentum, driven by improved collection efficiency after a good harvest season and GST rate rationalization. Arohan’s collection efficiency ratio (CER) currently stands at 99.7%, supported by the adoption of AI-based tools for collections and recoveries.

The IPO aims to strengthen Arohan’s capital base, enhance board governance, and lay the foundation for efficient management. Nambiar also noted that a government-backed credit guarantee scheme could boost banks’ willingness to lend to the MFI sector.

He added that the MFI industry has recently seen a dip in total outstanding loans and borrowers, but this trend is expected to reverse in the coming quarters. By the end of the current financial year, Arohan targets an outstanding portfolio of ₹7,000 crore, projected to reach ₹20,000 crore by 2030.

Additionally, Arohan plans to diversify into secured lending, including gold loans and loans against property, to expand its product offerings.