Arohan Financial Services is postponing its $200 million IPO due to a crackdown on lending by the Reserve Bank of India. The company primarily offers loans to groups of three to five women, with an interest rate of 24.25%, ranging from 25,000 to 100,000 rupees for a tenure of 24-30 months.
Arohan Financial Services Ltd. is postponing its initial public offering due to a directive from Indian regulators halting new loans for shadow lenders, including microfinance firms. The company, which focuses on providing loans to underserved women, had aimed to raise approximately $200 million through the IPO.
The Reserve Bank of India has banned four non-banking financial companies—Asirvad Micro Finance, Arohan Financial Services, DMI Finance, and Navi Finserv—from conducting business until they rectify operational and pricing issues. This marks the RBI's 14th intervention since 2020, raising concerns about investor confidence in India's financial services. Critics argue that the regulator's approach, grouping these entities together despite differing issues, may send mixed signals to the market.
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