NBFC-MFI Arohan Financial Services has outlined ambitious plans to enter the capital markets with a ₹1,500 crore initial public offering during the second quarter of the next financial year. Managing Director Manoj Kumar Nambiar announced that the company has already appointed merchant bankers and aims to file the draft red herring prospectus with SEBI within the next two months.

IPO Structure and Timeline

The public offering will follow a balanced approach between growth capital and investor exit opportunities:

The offer for sale component will enable existing investors including Tano Capital and Michael and Susan Dell Foundation to partially exit their investments, while promoters will not participate in any stake sale.

Operational Performance and Market Position

Arohan Financial Services demonstrates strong operational metrics in the current market environment. The company maintains a collection efficiency ratio of 99.70%, reflecting robust recovery mechanisms and borrower quality. Nambiar highlighted that the MFI sector has experienced positive momentum over the past three to four months, driven by improved harvest conditions and GST rate rationalization.

The company has integrated artificial intelligence tools into its collections and recovery processes, enhancing operational efficiency. This technological adoption positions Arohan competitively within the evolving microfinance landscape.

Growth Trajectory and Business Expansion

Arohan has established clear growth targets for the coming years:

The company plans to diversify its product portfolio beyond traditional microfinance offerings. Strategic expansion will include secured lending products such as:

• Gold loans
• Loans against property
• Other secured lending products

Sector Outlook and Strategic Rationale

Nambiar emphasized that the IPO will strengthen Arohan's capital base while establishing foundations for efficient management and credible board governance. The capital infusion will support the company's expansion plans and product diversification strategy.

The managing director noted expectations for government introduction of a credit guarantee scheme, which could enhance bank comfort levels for MFI sector lending. He also identified areas requiring sector-wide improvement, particularly the need for credit bureaus to update borrower data at quicker intervals to facilitate better lending decisions.

Despite acknowledging recent industry challenges including decreased total outstanding amounts and borrower numbers, Nambiar expressed confidence that these trends will reverse in coming quarters, supported by improving market conditions and policy initiatives.

The Department of Financial Services (DFS), Ministry of Finance, has launched a comprehensive composite salary account package for central government employees, designed to consolidate banking and insurance services under a single account framework. The initiative targets employees across all cadres — group A, B, and C — as part of the government's broader Viksit Bharat 2047 vision and the ambitious goal of achieving 'insurance for all by 2047'.

Comprehensive Service Integration

The composite salary account package integrates three core service segments to provide holistic financial solutions for government employees:

Banking Benefits and Features

The banking component of the package offers substantial advantages for government employees. Key features include zero-balance salary accounts, eliminating the burden of maintaining minimum balance requirements. The package provides free fund transfers through multiple channels including RTGS, NEFT, and UPI transactions.

Employees can access concessional loan rates across various categories including housing, education, vehicle, and personal loans. Additional banking benefits encompass waivers on locker rentals and extended family banking privileges, enhancing the overall value proposition for government staff.

Insurance Coverage Details

The insurance segment represents a significant component of the composite package, offering comprehensive protection across multiple scenarios:

Digital and Card Benefits

The digital services component focuses on enhancing convenience and lifestyle benefits for government employees. The package includes airport lounge access, providing comfort during official and personal travel. Employees benefit from rewards and cashback programmes, unlimited transaction capabilities, and zero maintenance charges on card services.

Implementation and Migration Strategy

DFS has issued specific directives to public sector banks regarding the package implementation. Banks are required to actively publicise the composite salary account package and organise comprehensive awareness campaigns within government departments. The migration process for existing salary accounts to the new scheme will be facilitated with proper employee consent, ensuring a smooth transition while maintaining account holder preferences.

The launch of this composite salary account package represents a significant step towards financial inclusion and employee welfare, providing central government staff with integrated banking and insurance solutions under a unified platform.