Business Segments – Driving Financial Inclusion

1. Microfinance Loans (Core Segment):
   • Focuses on income-generating loans for women in rural and semi-urban areas.
   • 97% of borrowers are women, with loans disbursed through 829 branches.
2. MSME Lending:
   • Provides credit to small businesses via 10 branches in eight states.
3. Financial Inclusion Products:
   • Offers insurance and savings products alongside credit services.

Strengths

1. Market Leadership: Fifth-largest NBFC-MFI in India with a dominant presence in Eastern India.
2. Rapid Growth: Loan portfolio grew at 68% CAGR (2020–2023), reaching ₹6,616 crore in advances by 2024.
3. Strong Asset Quality: Gross NPA improved sharply from 11.23% (2021) to 1.64% (2024); Net NPA near zero (0% in 2024).
4. Investor Backing: Promoters include Aavishkaar and I-Cap, with PE funds like Tano and Maj Invest.
5. IPO Potential: DRHP filed in 2023, enhancing liquidity prospects for unlisted shareholders.

Weaknesses

1. High Borrowing Dependency: Borrowings surged to ₹5,617 crore (2024), constituting 69% of liabilities.
2. Low PAT Margins: Despite revenue growth, PAT margins stood at 22.7% in 2024 due to rising operating costs.
3. Regional Concentration: Exposure to economically vulnerable low-income states increases default risks.
4. Scalability Challenges: Rapid expansion (829 branches) risks operational inefficiencies.

Financial Highlights (2021–2024)

1. Revenue Recovery: Interest earned rebounded from ₹858 crore (2022) to ₹1,380 crore (2024), a 61% growth.
2. PAT Turnaround: Shifted from a net loss of ₹160 crore (2021) to a profit of ₹314 crore (2024).
3. NPA Resolution: Gross NPA reduced by 85% (11.23% to 1.64%) and Net NPA to 0%, reflecting robust recovery mechanisms.
4. Advances Growth: Loan book expanded by 68% (₹3,925 crore in 2021 to ₹6,616 crore in 2024).
5. Balance Sheet Strength: Reserves grew 83% (₹958 crore to ₹1,757 crore), supporting debt-equity stability (1.72x P/B in 2024).
6. Valuation Metrics: Unlisted shares priced at ₹155 (2024) trade at P/E of 25x and P/B of 1.72x, aligning with pre-IPO benchmarks.

Arohan Financial Services Unlisted Shares Considerations

Arohan unlisted shares attract investors seeking exposure to India’s microfinance growth story. Key drivers include:

• IPO Catalyst: Successful listing could unlock valuation upside and liquidity.
• NPA Management: Sustained asset quality (0% Net NPA) boosts investor confidence.
• Rural Penetration: Focus on underbanked states aligns with financial inclusion goals.

Risks to Monitor:

• Debt Servicing: Rising interest costs (₹592 crore in 2024) may pressure margins.
• Regulatory Scrutiny: Compliance with RBI norms for NBFC-MFIs.
• Economic Sensitivity: Vulnerability to income shocks in low-income demographics.

With a ₹157.41 crore share capital and improving EPS (₹19.95 in 2024), Arohan’s unlisted shares price hinges on IPO progress, sector sentiment, and macroeconomic stability.

Key Drivers of Arohan Financial Services Unlisted Share Price

• IPO Catalyst: Successful listing could unlock valuation upside and liquidity.
• NPA Management: Sustained asset quality (0% Net NPA) boosts investor confidence.
• Rural Penetration: Focus on underbanked states aligns with financial inclusion goals.

For unlisted shares, liquidity and pricing depend on private market demand, sector trends, and the company’s ability to maintain its growth trajectory.

Disclaimer*This research has been conducted on available data. Investors are advised to perform their own research and due diligence before making any investment decisions. We are not responsible for any financial losses or inaccuracies in the data provided