Important dates with respect to IPO allotment and listing
IPO Open Date
To be announced
Established in 1991, Arohan Financial is one of the leading NBFC-MFIs in India. The company started its microfinance business in 2006. It operates in low-income, unpenetrated states of the country. The offerings of Arohan Financial Services include credit as well as insurance products. The former includes income-generating loans and other forms of financial assistance, while the latter covers life and health insurance products.
Arohan Financial Services IPO Objectives
- Fulfilment of general corporate purposes
- Augmenting the capital base
- Prepayment or repayment of the entire or a small part of its outstanding borrowings
Arohan Financial Services IPO - Details
Arohan Financial has filed preliminary papers with SEBI to raise Rs. 1750 crores to Rs. 1800 crores. As per its DRHP, the company’s IPO will include a fresh issue of Rs. 850 crores and an offer for sale (OFS) of 27,055,893 shares by existing shareholders.
Qualified institutional buyers (QIBs) can subscribe to up to 50% of the IPO, whereas retail individual investors will have up to 35% of the reserved portion. 15% of the issue size will be set aside for non-institutional investors. Furthermore, eligible employees of this company can subscribe up to 5% of Arohan Financial’s
Why Should You Invest in Arohan Financial Services IPO?
Besides an impressive scale of operations, this company has healthy profitability indicators and a highly experienced management team that has a proven track record.
Furthermore, Arohan has a well-diversified borrowing profile owing to a high share of funding received from banks. With the Indian financial services industry set to expand in the upcoming years, the outlook for this company appears to be quite positive.
Hence, investors might consider subscribing to its initial offer. That said, investors should take into account various aspects like the company’s weaknesses, financials, etc., before applying.
|For the Year/Period Ended
|Profit After Tax (in million)
|Total Revenue (in million)
|Total Assets (in million)
|Total Expenses (in million)
|30 September 2020
|31 March 2020
|31 March 2019
|31 March 2019
Know before investing
In terms of AUM, this company is one of the largest NBFC-MFIs in India. As of 30 June 2020, Arohan’s AUM stood at approximately Rs. 4,862 crores. It has a proven track record of 13 years.
Arohan Financial has a strong capitalisation profile owing to adequate internal capital generation and equity infusions on a regular basis.
This company’s management team includes seasoned professionals who have years of experience in the domain of financial services.
Arohan’s NIM stood at 10.49% of AMA in FY2020, whereas in the previous financial year, it was 11.14%. Operating expenses of this company diminished to just over 4.5% of AMA in FY2020 in comparison to 5.43% in FY2019.
Arohan’s portfolio loans in its microfinance segment are unsecured. Moreover, they are backed by group-based social security. Thus, the company has a risky asset class.
A significant portion of this company’s revenue in FY2020 comprised interest income earned from its microfinance business. Owing to this single-line nature of operations, there is restricted diversification in relation to this company’s revenue stream.
Arohan Financial Services could experience headwinds due to a lack of operational efficiency or deterioration in the quality of assets. These factors would have a direct impact on this company’s profitability.
In case Arohan Financials’s adjusted gearing increases on a sustained basis owing to the degradation of its capitalisation profile, it could pose a threat to this company.
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Arohan Financial Services IPO FAQs
Follow these steps to apply for the Arohan Financial IPO with the Angel One app:
– Go to the ‘Investment Opportunities’ section of the App.
– Now, tap on ‘IPOs and FPOs’ and enter the required details.
– Provide the valid UPI ID as approved by NPCI.
– Finally, select the ‘Invest’ option and place your IPO order.
Here’s a step-by-step guide to help you create a UPI ID through the BHIM app:
– First, download the BHIM app.
– Now, verify your mobile number and register the passcode.
– Choose your bank from the list.
– Now, the app will fetch your bank details. However, if you have more than one bank account, select the one that you wish to register on the app.
– For security, you need to set up a UPI PIN.
– Finally, check your UPI ID in the Profile section.
Your IPO application can get rejected if you:
– Provide an incorrect UPI PIN or ID while approving the mandate request
– Enter a Demat account, UPI ID or bank account that is not linked to the same PAN
For example, if you apply for Arohan Financial IPO with your Demat account using your brother’s UPI ID, your application will get rejected. This is because your PAN is not linked with your brother’s UPI or your Demat account isn’t linked with your brother’s bank account.
It’s not entirely possible to guarantee any IPO allotment. This is because when the shares are oversubscribed, IPO is allotted via a lottery system. Angel One is simply an online platform to apply for IPO. It cannot guarantee you allotments.
But there are ways in which you can increase your chances of allotment:
– Use only 1 Demat account that is linked to your PAN.
– Try to apply at the cut-off price.
– Make sure that the Demat account, UPI ID, and bank account are all linked to one PAN. If not, your application for Arohan Financial IPO can get rejected.