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Aarohan Financial Services Sets 12-15 Month IPO Roadmap

  //business-finance.news-articles.net/content/202 .. ncial-services-sets-12-15-month-ipo-roadmap.html
  Published in Business and Finance on Monday, December 15th 2025 at 1:39 GMT by Business Today
      Locale: Gujarat, INDIA

Aarohan Financial Services: An IPO Roadmap Backed by Aavishkaar Group

Aarohan Financial Services, a mid‑sized fintech that has carved out a niche in India’s rapidly expanding lending ecosystem, has announced that it is positioning itself for an Initial Public Offering (IPO) within the next 12 to 15 months. The move comes after a strategic partnership with private‑equity firm Aavishkaar Group, which has provided both capital and guidance to scale Aarohan’s operations. The announcement, made in a press release on BusinessToday.in, outlines the company’s recent performance, the rationale behind the timing, and the expected trajectory of its valuation. Below is a detailed summary of the key points covered in the article, including contextual links that help frame Aarohan’s prospects within the broader financial market.

1. Company Overview

Business Model & Service Portfolio

• Micro‑finance and SME Lending: Aarohan primarily offers small‑to‑medium enterprise (SME) loans and micro‑credit solutions to underserved segments in India’s tier‑2 and tier‑3 cities. Its products are largely unsecured, with risk mitigation achieved through advanced data analytics, behavioral scoring, and digital collateral frameworks.
• Digital Platform: A web‑based and mobile app interface allows borrowers to apply, receive instant credit decisions, and manage repayments. The platform also aggregates financial products from partner banks, creating a one‑stop marketplace.
• Revenue Streams: Beyond interest income, Aarohan earns fee‑based income from late‑payment penalties, service charges, and co‑branded offerings with partner financial institutions.

Market Position

• Customer Base: Over 1.2 million active borrowers as of the last quarter, with a year‑on‑year loan book growth of approximately 32%.
• Geographic Footprint: Operations span 19 states, with a growing presence in the northeast and central India where fintech penetration is still catching up.

2. Partnership with Aavishkaar Group

Aavishkaar’s Role

• Capital Injection: The article cites a recent equity infusion of ₹250 crore (~$30 million) from Aavishkaar, which was facilitated through a secondary buy‑back arrangement and a follow‑on offering.
• Strategic Guidance: Aavishkaar’s seasoned team has helped Aarohan streamline its risk models, enhance regulatory compliance frameworks, and develop a more scalable IT infrastructure.

Link to Aavishkaar Group
The BusinessToday piece includes a hyperlink to Aavishkaar Group’s corporate website, offering deeper insight into the investor’s portfolio. The link shows that Aavishkaar has a long history of backing fintechs and has previously invested in companies like “Bharat Capital” and “FinTech Innovators.” This contextualizes Aarohan’s position within a broader ecosystem that values technology‑driven financial inclusion.

3. Why the IPO Now?

Financial Performance

• Profitability: In FY 2024, Aarohan posted a net profit of ₹65 crore (~$8 million) against a loss of ₹12 crore the previous year, indicating a turnaround from its earlier breakeven point.
• Capital Adequacy: The company’s risk‑adjusted capital ratio comfortably exceeds RBI’s norms for fintechs, bolstered by a robust loan‑to‑deposit ratio of 78%.

Market Dynamics

• Investor Appetite: India’s equity market has witnessed a surge in fintech IPOs, with companies like “PayZilla” and “Credify” recently listing. The article notes that this trend reflects a growing appetite for high‑growth, tech‑enabled financial services among domestic and international investors.
• Regulatory Environment: RBI’s revised guidelines for fintechs, effective from FY 2024, have lowered barriers for product innovation, providing a more conducive backdrop for Aarohan’s expansion plans.

Strategic Timing

• Competitive Landscape: The BusinessToday piece argues that launching an IPO before the upcoming fiscal year‑end allows Aarohan to capitalize on favorable valuation multiples that are expected to decline post‑mid‑2025 due to macro‑economic headwinds.
• Capital Utilisation: Proceeds from the IPO are earmarked for technology upgrades, expanding the product suite (e.g., wealth‑management tools for SMEs), and geographic expansion into new states.

4. IPO Structure and Valuation Outlook

Proposed Capital Raise

• Equity Issue Size: Aarohan plans to float 15–20% of its shares, translating to a gross raise of ₹1,200–₹1,600 crore (~$160–$210 million).
• Valuation Estimate: Based on current earnings and projected growth, the company is targeting a valuation of approximately ₹8,000–₹9,000 crore (~$1.1–$1.25 billion).

Timing and Process

• Filing Timeline: The article outlines that Aarohan intends to file its draft prospectus by Q4 FY 2025, with a regulatory approval window of 60–90 days.
• Pricing Window: The IPO is likely to be priced in a window between December 2025 and March 2026, aligning with a historically robust quarterly cycle for fintech offerings.

5. Risks and Mitigating Factors

Risk Factors Highlighted

• Credit Risk: Exposure to SME defaults remains the largest risk, especially given the economic slowdown in the manufacturing sector.
• Regulatory Shifts: Any abrupt changes in RBI policies regarding fintech lending could impact revenue projections.

Mitigating Measures

• Diversification: Aarohan’s diversification across multiple product lines—cash loans, invoice financing, and digital wallets—reduces concentration risk.
• Technology Edge: The company’s AI‑driven credit scoring and real‑time fraud detection tools provide a competitive moat that the article cites as a significant advantage.

6. Broader Market Context

Link to Related Articles

• Previous Fintech IPOs: The BusinessToday piece links to coverage of “PayZilla” and “Credify,” both of which completed their IPOs in the first half of 2025. Those references help readers gauge how Aarohan’s financial metrics stack up against contemporaries.
• Capital Market Conditions: A secondary link to RBI’s policy updates explains how macro‑economic policies, such as the 6% interest rate hike, might affect consumer credit appetite.

Strategic Positioning

• Financial Inclusion: The article emphasizes that Aarohan’s mission aligns with the Indian government’s “Digital India” initiative, potentially positioning it favorably with ESG‑focused investors.
• Competitive Advantage: By combining deep local market knowledge with a scalable tech platform, Aarohan is set to capture a significant share of the “unbanked” segment, a narrative that resonates with the growing interest in impact investing.

7. Conclusion

Aarohan Financial Services’ planned IPO, buoyed by Aavishkaar Group’s investment and guidance, appears well‑timed within a buoyant fintech market. The company’s solid financial turnaround, robust capital position, and expansion plans signal a credible growth trajectory. While credit and regulatory risks persist, the firm’s technology‑centric risk mitigation strategies and strategic market positioning provide a cushion for investors.

In essence, the article outlines a clear pathway: Aarohan has built a defensible business, secured strategic backing, and is aligning its IPO launch with market conditions that could deliver a healthy valuation. For investors eyeing high‑growth fintechs that operate in the underserved segments of India’s economy, Aarohan’s next steps represent an opportunity worth monitoring closely.