Arohan Financial Services Moves Closer to IPO, Launch Timeline Set at 12–15 Months

After years of private market buildup and strategic equity infusions, Arohan Financial Services is finally on track for a long-awaited public market debut. Industry watchers and company insiders alike now expect the Arohan Financial Services IPO to hit the market within the next 12–15 months, potentially in FY27, marking a watershed moment for one of India’s leading microfinance institutions. 

This development signals renewed confidence from promoters, investors and regulators about both Arohan’s business fundamentals and the broader opportunity in financial inclusion lending. As India’s microfinance sector matures, the company’s IPO, if successful, could emerge as one of the most transformative listings from the NBFC-MFI segment in recent years.

Business profile: a focused microfinance franchise

Arohan operates as an NBFC-MFI, with lending largely directed towards women borrowers and micro-entrepreneurs in under-banked regions. Its loan book is concentrated in eastern and northern India, with a presence across states such as West Bengal, Bihar, Assam, Odisha and Uttar Pradesh.

Unlike diversified NBFCs, Arohan has remained largely focused on microfinance, a segment that demands strong risk controls, local underwriting knowledge and close borrower engagement. This focus has helped the company build operational depth, even as the sector has seen periodic stress from regulatory changes and regional disruptions.

Founded as a focused microfinance institution, Arohan has spent the past decade building scale with the support of long-term institutional investors. Backed by the Aavishkaar Group and other global impact-focused funds, the company has prioritized measured growth, capital discipline and governance, key prerequisites for a public listing.

Over the years, Arohan has raised multiple rounds of private capital, allowing early investors to partially de-risk while funding expansion into new geographies. The proposed IPO would mark the next phase of this journey, offering public market investors a chance to participate in a business that sits at the intersection of financial inclusion and regulated lending.

From Private Equity Backing to Public Markets

Arohan’s journey toward an IPO has been marked by a steady transition from private equity capital to broader market readiness. Backed by the Aavishkaar Group, the firm has attracted significant institutional interest over the years from sponsors like ASK Financial Holding, the Michael & Susan Dell Foundation, and other global development finance entities. 

Unlike a flash-to-market listing, Arohan’s timeline allows for:

• Advisor selection and due diligence

• Prospectus drafting and SEBI review

• Roadshows and institutional book-building

• Market-condition assessment for valuation

What investors will watch closely

As Arohan moves closer to filing its draft prospectus, several aspects will be under scrutiny:

• Asset quality trends and regional concentration

• Cost of funds and margin sustainability

• Borrower growth versus credit discipline

• Corporate governance and promoter intent post-listing

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Microfinance IPOs tend to be evaluated conservatively by the market, given the sector’s sensitivity to economic cycles and regulatory oversight. How Arohan positions itself on these parameters will play a key role in investor response.

Financial Snapshot

Financially, Arohan crossed ₹1,580 crore in revenue in FY25, while returning to profitability with ₹110 crore in net profit. Asset quality remains controlled, with net NPAs under 0.5%, a key metric public-market investors track closely in microfinance businesses.

Asset Quality

Gross NPA: ~2.77–2.85%

Net NPA: ~0.47–0.53% 

Capital Adequacy Ratio (CAR): 34.09%

Conclusion

Arohan Financial Services’ journey toward a public listing reflects a lender that has moved beyond rapid expansion and into a phase of consolidation and balance-sheet strengthening. The contrast between FY24’s strong profitability and FY25’s moderation highlights the realities of operating in the microfinance segment—where asset quality, regulatory discipline, and capital buffers matter more than headline growth.

With a scaled national presence, a seasoned investor base led by Aavishkaar Group, and a clear focus on risk management, Arohan enters its IPO preparation phase with the fundamentals of a mature NBFC-MFI. The company’s recent emphasis on provisioning, capital adequacy, and controlled portfolio growth signals alignment with public-market expectations rather than short-term performance optics.

As India’s microfinance sector gradually regains stability and investor confidence, Arohan’s move toward listing stands as a reflection of the sector’s evolving maturity. The coming months will define how effectively the lender positions its long-term growth narrative within the framework of transparency, governance, and sustainable returns—elements that increasingly define credibility in India’s capital markets.