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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