Kolkata-based microfinance start-up Arohan Financial Services has raised Rs 730 crore in an investment round led by private equity firms like Nuveen, Dutch development bank FMO and Piramal Alternatives. According to a report by the Economic Times (ET), Nuveen and FMO invested Rs 165 crore and Piramal and a European development financial institution invested Rs 200 crore in the company. 

Arohan raised the money through the issuance of compulsorily convertible preference shares (CCPS). Hence, its promoter, Aavishkar Group, will continue to hold a 33 per cent stake in the company without any equity situation for one year. 

This has been Arohan's second round of equity fundraising after the Covid-19 pandemic. Prior to this, it raised Rs 168 crore in February 2021. 

The latest fundraising round would help the company to expand its business operations across multiple new geographies. The company currently operates 835 branches in 15 states and is planning to start its services in Maharashtra, Haryana and Gujarat by the end of this year. Additionally, it is eying to bolster its footprints in the states like Madhya Pradesh and Uttar Pradesh. 

The company currently has Rs 5,337 crore assets under management ( AUM) and with the latest round of funding, it is planning to surpass Rs 10,000 crore AUM by March. It is also targeting its initial public offering (IPO) plans. According to the ET report, the lender has developed its credit-scoring model and offers loans to women in rural and semi-urban localities at interest rates of 23-26 per cent. 

"We are now future-ready with our digital lending offering called Arohan Privilege. Microfinance customers can apply for instantaneous loans through our proprietary apnaArohan app from the comfort of their homes," Manoj Kumar Nambiar, the CEO, told ET in an interaction.