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Micro-lender Ujjivan raises $15M through NCDs

It raised $96 million from CX Partners, CDC, NewQuest Asia Investments and Bajaj Holdings.

Bangalore-based Ujjivan Financial Services Pvt Ltd, one of the top-tier microfinance institutions in the country, has raised Rs 100 crore ($15.5 million) from domestic mutual funds through listed and redeemable non-convertible debentures, the company said in a statement.

The securities will be listed on Bombay Stock Exchange.

HSBC was the sole arranger to the issue.

Samit Ghosh, founder and managing director, Ujjivan, said, “Ujjivan has raised debt from a vast pool of domestic mutual funds and this transaction is continuation in the journey to diversify our source of funding.”

Tarun Balram, managing director and head of capital financing, HSBC India, said, “Such transactions present a diversification opportunity for both investors and the microfinance sector. Growing access to capital markets is also a testimony to the credit strength of Ujjivan.”

Recently, Ujjivan raised Rs Rs 600 crore ($96 million) from CX Partners, CDC, NewQuest Asia Investments and Bajaj Holdings in one of the largest fundraise by a micro finance company. The fundraise also saw existing investors IFC and Elevar Equity participate in the transaction.

It came close on the heels of Bandhan Financial Services Pvt Ltd getting commitment of around $260 million from IFC and Singapore's sovereign wealth fund GIC.

Founded by Samit Ghosh in 2005, Ujjivan is headquartered in Bangalore with offices in New Delhi, Kolkata and Pune. It operates a network of 423 branches in 21 states and three union territories.

It has gross managed assets of more than Rs 3,100 crore. It follows joint liability group lending and individual lending models and has a network of 423 branches across the country in 21 states and three union territories.

The firm had previously raised money from several investors, including Lok Capital, Unitus, Sequoia Capital, Wolfensohn Capital, Caspian, Michael & Susan Dell Foundation, Bellwether, Dutch development financial institution FMO besides debt funding from SIDBI and Developing World Markets.

Ujjivan Financial Services Ltd. is a microfinance company. It provides financial services to urban, semi-urban, and rural areas. It offers business loan, family loan, group loans, agriculture and allied loan, value added group loan like business top up loan, emergency loan, education loan, individual loans such as individual business loan, individual livestock loan, home improvement loan, higher education loan, individual agriculture loan, secured business loan, secured home loan, pragati individual loan and insurance. The firm also offers information system solution services including processing services, technology services and administration services solutions. The company was founded in 2005 and is based in Bengaluru, Karnataka with an additional office in New Delhi, India.

(CX Partners, CX Partners Pte. Ltd.)

CX Capital Management Ltd. is a private equity firm with $500 million assets under management. It provides growth capital to companies operating in India. The firm also makes distressed, turnaround, and mezzanine investments. The firm seeks to invest in power, electronics, hotels, telecommunications, consumer products and services, information technology and financial services. The company was founded in 2009 and is based in New Delhi, India.

CDC Group Plc is the United Kingdom Government-owned fund of funds, with $4 billion assets under management. The firm uses its own balance sheet to invest in private equity funds focused on the emerging markets of Asia, Africa and Latin America, with particular emphasis on South Asia and sub-Saharan Africa. The firm seeks to invest in manufacturing, agriculture, infrastructure, financial institutions, construction, healthcare, and education. It typically invests between $10 million and $20 million for infrastructure. The company was founded in 1948 and is based in London, United Kingdom.

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