Start-up firm Equitas Micro Finance India (P) Ltd plans to raise close to 10 billion rupees through a mix of equity and debt to help expand its micro-lending business, a top official said on Friday.
The company, which raised Rs 50 crore worth of private equity funds in August, plans to raise around Rs 400 crore via debt by March and another Rs 600 crore through equity by January, Managing Director, P.N. Vasudevan said.
"We are in the process of leveraging our equity by raising debt and will raise equity capital to fund our growth for the next year," he said.
The firm was in talks with banks for raising debt and was also talking to investors including private equity firms to raise equity, which would be done through issue of fresh shares.
Equitas, which is currently present only in the southern state of Tamil Nadu, plans to expand to seven other states by March, he said.
The annual demand for microfinance is around 2 trillion rupees while the supply is only around 200 billion rupees, Vasudevan, who was earlier with Development Credit Bank (DCBA.BO: Quote, Profile, Research), said.
"There is a 90 percent unmet client demand," he said.
In August, the company issued convertible preference shares to private equity firms, Bellwether Microfinance Fund Pvt. Ltd., India Financial Inclusion Fund and MVA Ventures and the shares would be converted to equity by August 2009.
(This article is provided by Reuters)
