The book building process for the IPO is on and the lender is in the process of finalizing investors for pre-IPO placement, managing director Manoj Kumar Nambiar told ET. The lender will be looking to raise up to Rs 150 crore from pre-IPO placement.
The IPO includes a primary issue worth Rs 850 crore and an offer for sale up to 2.7 crore equity shares. Existing investors such as Tano India, Michael & Susan Dell Foundation, Maj Invest, TR Capital and Aavishkaar Goodwell India Microfinance Development Company II (AG II) will be looking to partially exit through the sale.
The size of the primary issue includes funds raised through the pre-IPO placement.
Its principal owners — Aavishkaar Venture Management Services and Intellectual Capital Advisory Services, both part of the Aavishkaar Group – jointly hold 34 per cent in the company and will not take part in the offer for sale.
AG II held around 15.43 per cent in Arohan on the date when the latter filed a prospectus for IPO, with Tano Capital holding 14.07 per cent, Maj Invest 12.82 per cent and TR Capital 8.09 per cent. The Dells has 2.72 per cent interest in the company.
At the time of filing the prospectus, Arohan was looking to raise the equity at around Rs 330 a share, according to market sources. “The second wave struck after that and the pricing will be arrived at after factoring in the impact of it,” a person familiar with the development said.
Edelweiss Financial Services, ICICI Securities, Nomura Financial Advisory & Securities and SBI Capital Markets are book running lead managers for the issue.
The IPO market has seen a frenzy with several firms raising equity in the last few months. In the first fortnight of August, as many as eight companies raised Rs 18,244 crore, the highest in a month for IPOs since November 2017.
Arohan, set up in 2006, is the largest NBFC-MFI in the eastern region with Rs 4600 crore gross loan portfolio as on March 31, 2021. It raised Rs 189 crore in February from ASK Financial Holding, Kiran Vyapar Ltd and Arohan ESOP Trust at Rs 210 per share.
The lender provides micro loans to women to fund their small businesses like running tea stalls, tailoring shops. It has recently raised lending rate to 20.09 per cent from the sub-20 level of 19.91 per cent, which was announced for the first time in July this year.
The company faced Rs 160 crore loss in FY21 compared with Rs 127 crore net profit in the preceding fiscal, owing to the pandemic-led stress and asset quality deterioration. Its gross non-performing assets ratio jumped to about 11 per cent at the end of March 31, 2021 from 2.25 per cent a year back.
Arohan transferred part of its MSME business along with other related assets to Ashv Finance through a slump sale for Rs 63 crore in the last fiscal.
