Indian non-bank finance firm Arohan Financial Services has filed its Draft Red Herring Prospectus (DRHP) with SEBI to launch an initial public offering, according to latest reports. The company is selling new shares worth ₹600 crore while existing investors are looking to offload up to 40.4 million shares. As reported by Business Standard, the filing comes more than a year after the Reserve Bank of India removed lending restrictions it had imposed on the firm and other non-bank lenders due to 'usurious' pricing and high markups.
The ₹600 crore fresh issue is specifically designed to strengthen Tier 1 capital and support future growth across rural lending markets. According to the latest filings, the company will use proceeds from the sale of new shares to boost its capital base, positioning itself for enhanced lending capabilities in rural sectors. This strategic approach aligns with the company's focus on expanding its presence in underserved markets.
Among existing investors, US retirement financial services firm Teachers Insurance and Annuity Association, which holds a 12.06 per cent stake in the company, is selling about 9.7 million shares, while the Michael & Susan Dell Foundation, with a 2.05 per cent stake, is looking to offload 874,614 shares. According to Business Standard, the company will use proceeds from the sale of new shares to boost its capital base.
For the year ended March 31, 2025, Arohan Financial Services posted a 65 per cent drop in profit, weighed down by a surge in expenses. However, as reported by Business Standard, its net interest income rose nearly 13 per cent. The company's financial performance reflects the challenges faced in the non-banking financial sector while demonstrating resilience in core lending operations.
DAM Capital Advisors, Motilal Oswal Investment Advisors and SBI Capital Markets are managing the issue. According to Business Standard, after a strong run for Indian IPOs in 2025, sentiment towards floats has weakened this year amid conflict in the West Asia. Still, big-ticket IPOs such as Jio Platforms and National Stock Exchange are in the offing.
