Private equity firms Advent International and Multiples PE will invest $230 million (Rs 1,930 crore) in the country’s second largest microlender Svatantra Microfin Pvt. Ltd, as it expands its operations in the country.
The deal comes seven months after Svatantra said it will acquire Chaitanya India Fin Credit Pvt Ltd, a wholly owned subsidiary of Flipkart co-founder Sachin Bansal’s Navi Group, for Rs 1,479 crore (around $179.6 million).
Svatantra, a more than a decade-old microfinance institution led by Ananya Birla, the daughter of industrialist Kumar Mangalam Birla, provides small-ticket loans to rural and largely women entrepreneurs.
“This transformative era for Svatantra propels us towards our goal of becoming the most impactful microfinance institution, creating a conducive environment for entrepreneurs who fuel India’s growth story,” said Birla, chairperson, Svatantra.
The deal will be completed after receiving statutory and regulatory approvals from authorities, including the approval of the Reserve Bank of India and Competition Commission of India. While the financial details of the transaction were not disclosed, Ananya Birla will continue to hold a significant majority stake, the company said.
The company claims to serve over 4.2 million customers across over 20 states and manages an AUM Of nearly Rs 13,000 crore. Previously, it bought Micro Housing Finance for Rs 300 crore in 2018.
“We believe the microfinance sector serves as a cornerstone for financial inclusion for women entrepreneurs in rural areas, and Svatantra is uniquely placed to create one of the largest and most resilient microfinance institutions,” said Shweta Jalan, managing partner, Advent International.
The global PE firm has also backed Yes Bank, Aditya Birla Capital, KreditBee, ASK Investment Managers among others in the financial services sector in India.
Meanwhile, Multiples, which marked the first close of its fourth vehicle last year after collecting $640 million (over Rs 5,200 crore) from marquee anchor investors including Canada's largest pension fund, has a portfolio in the sector including Cholamandalam Finance, Vastu, Veritas Finance, APAC Financial Services and Acko Tech among others.
“We look forward to partnering the Svatantra team in its journey of expanding products, stepping-up technology and enhancing analytics to widen the reach of its transformational impact,” said Renuka Ramnath, founder, MD and CEO, Multiples PE.
