New Delhi, May 18 -- US-based alternative investment firm Tano Capital, Hong Kong-headquartered secondaries private equity firm TR Capital and several impact-oriented investors including the Michael & Susan Dell Foundation (MSDF) are set to make an exit from an Indian financial services company.

Tano, TR Capital, MSDF as well as Teachers Insurance and Annuity Association of America (TIAA), Dutch development finance institution FMO, Maj Invest, and Impact Fund Denmark (erstwhile IFU) plans to sell shares of Arohan Financial Services Ltd via the company's initial public offering.

Arohan has filed a draft red herring prospectus for the IPO that comprises a fresh issue of Rs 600 crore (about $62.5 million) and an offer for sale of 40.44 million shares by its investors and its promoter, the Aavishkaar group.

The IPO filing comes a few months after VCCircle reported in January that the company was looking to restart its process to go public. The company had previously filed draft IPO papers in 2021. Its IPO plans were derailed due to market conditions and after the Reserve Bank of India barred it, and three other NBFCs, from sanctioning new loans in October 2024 because of non-compliance with norms. The RBI lifted those restrictions in January 2025.

IPO details

Tano Capital, via its second India fund, plans to sell up to 4.46 million shares. TR Capital will offload 2.59 million shares and MSDF will divest up to 874,614 shares. TIAA intends to sell 9.7 million shares, FMO 6.2 million, Maj Invest 4.1 million, Impact Fund Denmark about 4 million and the Dutch bank Triodos almost 1.5 million shares.

Tano was established as a family office by Chuck Johnson, a descendant of the Johnson family that founded American asset management behemoth Franklin Templeton. The firm decided to shut down after Johnson died in 2021. Since then, it has been exiting its investments. It managed two funds in India aggregating $210 million (around Rs 1,700 crore). Its second fund was raised in 2011 and deployed across 10 companies.

Tano first invested in Arohan in 2015 and reinvested in the two following years. The firm made partial exits in 2018 and 2022. It is one of Arohan's largest shareholders with a 10.47% stake. TIAA owns 12.06% and is the company's biggest shareholder. TR Capital owns 6.1% and MSDF holds 2.05%. TR Capital entered the cap table in 2018 through a secondary purchase from Tano. MSDF first invested in the company in 2008.

Kolkata-headquartered Arohan, a large microfinance-focused non-banking financial company (NBFC) founded in 2006, has a presence across 17 states through more than 1,000 branches. It focuses on microfinance loans and has been diversifying into secured products such as MSME loans, gold loans and loans against property.

Over the past few years, the lender has been diversifying beyond microfinance into products such as gold loans, loans against property and MSME lending to improve portfolio quality and expand margins.

Arohan's net profit declined to Rs 110 crore in FY25 from Rs 314 crore in the previous year, as its loan book contracted. Profit for the nine months ended Dec. 31, 2025 was Rs 60.7 crore.

The company's assets under management fell to Rs 6,003 crore as of March 31, 2025, down from Rs 7,112 crore a year earlier, amid RBI-imposed restrictions and muted disbursement trends across the microfinance sector. However, the AUM climbed to Rs 6,308 crore by the end of December 2025, the draft prospectus showed.

Published by HT Digital Content Services with permission from VC Circle.