Arohan Financial Services Limited | Annual Report 2022-23

Navigat ing the Horizon Strong financials, warranting steadiness through liquidity Arohan’s strong liquidity and capitalization allow the Company to be steady, and gain the confidence of its stakeholders. With this, Arohan is well positioned to steer its Vision 2027 to realisation, both operationally and financially. Post the COVID-19 wave 2 in April- May 2021 and wave 3 in January 2022, the FY 2023 has been a year of growth for the microfinance industry. The industry witnessed significant growth of ~22% in its portfolio (YOY) as of March 31, 2023. Accordingly, there were significant changes in the borrowing profile of microfinance companies. With the new RBI guidelines released on March 14, 2022, and the deteriorating threat of COVID-19 with over 90% of the population vaccinated in India, the lenders’ appetite to lendtomicrofinancealso improved significantly. The debt-to- equity ratio for the microfinance industry increased from 3.5 at the end of FY 2021 to 3.7 at the end of FY 2023. The outstanding borrowing for the industry has also increased to INR 97,420 Cr at a YOY growth rate of 30%. In accordance, FY 2023 has been a significant year for Arohan with total assets and gross portfolio at INR 6,018 Cr and INR 5,357 Cr respectively. Management Discussion & Analysis Annual Report 2022-23 | 50 Arohan closed the business year with the following key financial results: • The Total Revenue stands at INR 1,091 Cr. • The Pre-Provisions Profit Before Taxes stands at INR 329 Cr. This bears testimony to Arohan’s strong fundamentals and business model. • CCPS infusion of ~INR 248 Cr by new investors was significant with increased Equity Capital base and accordingly improved CRAR at 28.74% • The Equity stood at INR 1,338 Cr. Arohan focused on rapid expansion in FY 2023, in line with its Vision 2027. In tune with the same, Arohan’s branch network grew from 740 in FY 2022 to 829 in FY 2023. The employee strength of the Company grew by 15%, from 7,160 in FY 2021- 22 to 8,030 in FY 2023. The company has ensured a comfortable fund position throughout the year to support its business. As on March 2023, the borrowing outstanding was close to INR 4,527 Cr.