AROHAN FINANCIAL SERVICES LIMITED IPO
Incorporated in 1991, Arohan Financial Services Limited is a leading NBFC-MFI with operations in the Low-Income States of India. It provides income-generating loans and other financial inclusion-related products to customers who have no or limited access to financial services. It is the largest NBFC-MFI in Eastern India and the fifth largest NBFC-MFI in India in terms of Gross loan Portfolio as of 30th September 2020. It had the second-highest GLP CAGR of 68% among the top 5 NBFC-MFI in India between fiscal 2017 to 2018. From fiscal 2018 to 2020, it had the highest customer growth among the top 5 NBFC-MFI at a CAGR of 49%.
Arohan Financial Services commenced microfinance operations in 2006. As of 30th September 2020, it served approximately 22 lakhs borrowers in 17 states which included 12 states out of the 14 low-income states. Microfinance business branch network has 710 branches in 11 states and the MSME lending business branch network has 10 branches in 8 states.
They offer a broad range of products to financially underserved customers. Financial products are classified into credit and insurance products. Credit products include income-generating loans and other loan products. Insurance products include life & health insurance covers that are issued & underwritten by certain Indian insurance companies. Along with this, it also offers term loans to small microfinance institutions (MFIs).
The promoters of the company are Aavishkar Venture Management Services Private Limited and Intellectual Capital Advisory Services Private Limited.
Strengths of the company
- Fifth largest NBFC-MFI in India and largest NBFC-MFI in Eastern India. It focuses on low-income states.
- A seasoned business model that incorporates a well-established risk management framework, loan approval processes, and recovery drives.
- Has a customer-centric approach with diversified product offerings.
- Advanced & scalable technology-enabled infrastructure.
- Access to multiple sources of capital and diverse borrowing relationships.
Purpose of the IPO
- To increase the capital base of the company
- For general corporate purposes.
Financial Performance of the company
| For the six-month period ended 30th September 2020 | FY 2020 | FY 2019 | FY 2018 | |
| Total Revenue | 507.39 | 934.50 | 651.59 | 327.87 |
| Total Expenses | 425.88 | 766.92 | 474.45 | 280.44 |
| Profit After Tax | 62.56 | 126.80 | 127.64 | 30.97 |
| Total Assets | 5,813.31 | 5,280.82 | 3,853.09 | 2,303.67 |
*All the values are in crores and as per DRHP.
Valuation of the Company
| For the six-month period ended 30th September 2020 | FY 2020 | FY 2019 | FY 2018 | |
| Basic Earnings per Share (EPS) | 5.75 | 12.07 | 14.05 | 3.52 |
| Diluted Earnings per Share (EPS) | 5.74 | 12.05 | 14.02 | 3.51 |
| Return on Net Worth (%) | 12.29% | 13.17% | 18.31% | 8.11% |
| Net Assets Value per Equity share | 91.32 | 87.26 | 67.90 | 43.17 |
*As per DRHP.
Arohan Financial Services Limited IPO DRHP
IPO details
| Face Value | ₹10 per equity share |
| Market Lot | Shares |
| Minimum Order Quantity | Shares |
| Price Band | ₹ - ₹ per equity share |
| Issue type | Book Built Issue IPO |
| Issue Size | ₹ Crores |
| Fresh Issue | ₹850 Crores |
| Offer for Sale | 2,70,55,893 equity shares |
| Listing | NSE, BSE |
Important IPO dates
| Open Date | May 2021 |
| Close Date | May 2021 |
| Basis of Allotment Date | May 2021 |
| Initiation of Refunds | May 2021 |
| The credit of shares to Demat Account | May 2021 |
| Listing Date | May 2021 |
Allocation Quota
| Category | Portion |
| Qualified Institutional Buyers (QIBs) | Not more than 50% |
| Non- Institutional Buyers (NIIs) | Not less than 15% |
| Retail Investors | Not less than 35% |
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