Arohan Financial Services Ltd is looking to raise around ₹150 crore from existing investors even as it will take a call on refiling for initial public offer at its board meeting slated sometime in May. The Kolkata-based NBFC-MFI, which is a part of the Aavishkaar Group, had filed draft red herring prospectus for its proposed initial public offer in February last year. It had plans to raise around ₹850 crore primary through the issue apart from secondaries.
According to Manoj Nambiar, MD, Arohan Financial Services, the company’s IPO ticket validity came to an end in April this year and it might have to refile the DRHP (draft red herring prospectus). “We have a board meeting in May and we will decide about refiling the DRHP but in the interim period we are looking to raise around ₹150 crore from existing investors,” Nambiar told BusinessLine.
Growth in disbursements
Arohan is expecting over 40 per cent growth in disbursements during the current financial year at around ₹ 6,500 crore, as against ₹4,500 crore in FY-22. Higher disbursements would be supported by an uptick in credit demand and improvement in collection efficiency.
Arohan currently provides microcredit to borrowers with a focus on underpenetrated States including Assam, Meghalaya,Tripura, Manipur in the North East; West Bengal, Bihar, Jharkhand and Odisha in the East; Madhya Pradesh, Chhatisgarh, Uttar Pradesh and Uttarakhand in central India.
The company had plans to expand its presence in Rajasthan, Punjab and Haryana and also strengthen its presence in Uttar Pradesh and Madhya Pradesh by setting up more branches, once its IPO is complete.
The growth in disbursements was more or less flat during the last two years due to Covid-induced lockdown and slowdown in economy. However, things have been steadily improving and there is a strong demand for credit, he said.
The NBFC-MFI has also seen a marked improvement in collection efficiency which has touched 98-99 per cent.
“There are some pockets where resolution is happening through government programmes like in Assam. But in most other places we are seeing a marked improvement in recoveries as things are returning back to normalcy post pandemic,” he said.