Capital Trust Ltd, a Delhi-based financial services firm, is raising funds from boutique investment firm Taj Capital Partners. The firm, which earlier this year entered the booming microfinance sector, is raising funds through a fresh issue of equity shares and warrants to the Delhi and Mumbai-based growth capital firm.
Capital Trust will allot 1.3 million equity shares to Taj Capital, which could mean a stake of just below 15% for the investor. The promoter and Taj Capital are also taking 1.3 million warrants each which will be convertible in the next 18 months.
The share price for the allotment was not disclosed, though at the current share price Capital Trust could raise anywhere between Rs 8 crore to Rs 10 crore through the equity component.
The shares of Capital Trust were trading at Rs 75.10 today noon, slipping marginally by 0.54%. Since its microfinance foray, the share price has increased from Rs 11 in February to hitting a high of Rs 79.95.
The board of the firm has called for an Extra-Ordinary General Meeting on November 18 to approve these measures. Besides microfinance, Capital Trust plans to distribute a wide range of products to the semi-urban and rural population in India.
Capital Trust, which was founded in 1985, earlier had a joint venture with Kinetic Engineering to finance all “Kinetic Honda” products in Northern India in the early 90's. It sold its stake in that venture to Kinetic in 1998 and later also started a JV with Development Bank of Singapore for stock broking.
The interest in the microfinance sector has increased and many listed companies are foraying in this sector given large and rapid growth opportunity. Also, the recent $350 million initial public offering (IPO) of SKS Microfinance, the first in India, has further encouraged investors.