61 | Annual Report | 2024-2025 portfolio quality relative to industry peers significantly enhanced lender confidence. As a result, the Company secured new sanctions from institutions such as Canara Bank and Bank of India—marking the first time since the COVID-19 pandemic, that these lenders extended fresh credit to Arohan. This also helped further diversify the Company’s already strong lender base while securing funds at more competitive rates. A key regulatory development during the year was the Cease & Desist Order issued by the Reserve Bank of India, which was lifted on January 3, 2025. Following the resumption of business operations, Arohan raised an additional INR 747 Cr in Q4 FY 2025. This post-revocation fundraise reaffirms the sustained confidence of lenders in Arohan’s business model and its proven ability to navigate and emerge resilient from challenging circumstances. In FY 2025, Arohan successfully diversified its lender base by onboarding new partners such as Canara Bank, Bank of India, Ujjivan Small Finance Bank, and Aditya Birla Finance Limited. During the year, the Company raised a total of INR 2,889 Cr—comprising INR 2,739 Cr through term loans and INR 150 Cr via direct assignment transactions. As of year-end, Arohan’s total outstanding borrowings stood at INR 4,703 Cr (excluding off balance sheet borrowings of INR 112 Cr), with its top five lenders being IDFC First Bank, SIDBI, State Bank of India, Axis Bank, and HSBC Bank. In FY 2025, Arohan further diversified its investment strategy by initiating investments in government securities. As of March 31, 2025, the total investment outstanding in government securities is INR 345 Cr. The Company’s cash and cash equivalents—including unencumbered fixed deposits and government securities and Treasury bills—amounted to INR 823 Cr at yearend, ensuring a strong liquidity position. Additionally, Arohan maintained undrawn sanctioned limits of INR 659 Cr, providing further financial flexibility. The Company reported a healthy Capital Adequacy Ratio (CAR) of 34.09% and a Debt-to-Equity Ratio of 2.32. As of the fiscal year-end, the Liquidity Coverage Ratio (LCR) stood at a robust 127%, reflecting prudent liquidity management and financial resilience. Way Forward in FY 2026 To support healthy business growth and strategic expansion, Arohan plans to raise approximately INR 6,500 Cr in debt during FY 2026. The fundraise will be executed through a mix of instruments, including term loans, External Commercial Borrowings (ECBs), direct assignment, and securitisation. Following a relatively muted disbursement year in FY 2025, the Company is targeting responsible and sustainable growth in FY 2026. Alongside scaling operations, Arohan aims to further strengthen its credit rating outlook and reduce its overall cost of borrowings. The Company also intends to diversify its investment portfolio by exploring opportunities in various fixed-income securities and money market instruments, reinforcing its commitment to prudent financial management and liquidity optimisation. The graph below depicts our borrowing mix as of March 31, 2025 15% 31% 54% 85% 3% 4% 8% PSUs Private Banks Term Loan Sub-Debt Sec. & Assign NCDs NBFC & Fls 15% 31% 54% 85% 3% 4% 8% PSUs Private Banks Term Loan Sub-Debt Sec. & Assign NCDs NBFC & Fls
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