Kolkata-based Arohan Financial Services Pvt. Ltd has raised Rs 155.5 crore ($24.1 million) from new and existing investors to expand its operations, the microfinance institution said in a statement.
The company, part of the Aavishkaar-Intellecap Group, received Rs 97 crore from Maj Invest, an asset management firm based out of Denmark; and the remaining from existing investors Tano Capital, journalist Swaminathan Anklesaria Aiyar and other individuals, and promoter group firm Aavishkaar Venture Management Services.
Manoj Kumar Nambiar, managing director at Arohan, told VCCircle that Maj Invest picked up a stake of about 13% in the company and that the promoter group owns about 32% after the stake sale.
Late last year, VCCircle had reported that the company was looking to raise $30 million in a round where some early investors such as India Financial Inclusion Fund (IFIF) and Michael & Susan Dell Foundation (MSDF) could be looking to exit.
Nambiar said the current round is entire a primary infusion of capital and the early investors could be looking for an exit in six months’ time.
Arohan will use the capital to expand its operations to Uttar Pradesh and Tripura, and strengthen its presence in states where it already operations, the statement said.
The company focuses on the eastern, northeastern and central parts of India. It has 271 branches in 93 districts in seven low-income states of India—Assam, Bihar, Chhattisgarh, Jharkhand, Meghalaya, Odisha and West Bengal.
Arohan has a loan portfolio of Rs 1,031 crore as of 30 April 2017, and has a customer base of 7.4 lakh. It plans to increase its loan portfolio to Rs 10,000 crore and the customer to 60 lakh by 2022.
Nambiar said that this capital infusion, along with a rights issue in January, has made Arohan one of the best-capitalised microlenders.
Earlier this year, Arohan tied up with payments bank licensee and digital wallet firm Paytm to promote cashless transactions. It aims to convert 30% of its disbursals to a cashless mode by the end of March 2018.
The Aavishkaar-Intellecap Group has over $400 million in assets under management. It has 2,500 team members across three Asia, Africa and the Americas.
Timeline of funding
Arohan raised Rs 2 crore in 2006 from Bellwether. In 2008, MSDF, Lok Capital I, a fund managed by Lok Advisory Services Pvt. Ltd; Bellwether, along with Aiyar invested an undisclosed amount. Bellwether, MSDF and Lok Capital again invested Rs 15 crore in 2010.
In 2012, Bellwether sold its entire stake while other investors such as MSDF, IFIF, IntelleCash and Aavishkaar Goodwell India Microfinance Development invested Rs 62 crore. Aavishkaar, MSDF and Aiyar invested more in Arohan in 2013.
Last year, Arohan raised Rs 60 crore from private equity firm Tano Capital to increase its net worth and expand operations.