Equitas gets $26M equity infusion from IFC, existing investors
Equitas Holdings, a Chennai-based microfinance and micro-housing finance company, has raised $ 26 million (Rs 140 crore) equity capital. It raised Rs 90 Crore from World Bank arm IFC and another Rs 50 Crore from its existing investors, Microventures and Caspian, to fund its geographical expansion and scale up its new businesses.
Equitas Holdings is a core investment company with operating subsidiary NBFCs.
The company through its operating subsidiaries recently diversified into the allied financial services segments of used commercial vehicle finance and affordable housing finance.
Equitas had transferred its microfinance business to Singhivi Investment & Finance (SIFPL) from April 1, 2011. After the transfer, Equitas was renamed as Equitas Holdings and SIFPL was renamed as Equitas Micro Finance India.
Under the new structure, there is a holding company and three operating subsidiaries – one each for microfinance, vehicle finance and housing finance. Equitas acquired two NBFCs (SIFPL and V A P Finance Ltd) to run the micro and vehicle finance businesses and has obtained a licence from National Housing Bank in January 2011 for housing finance business.
The current microfinance entity will then become the non-operating holding company. V A P Finance Ltd has been reconstituted as a private limited company and renamed Equitas Finance Pvt Ltd (EFPL). The housing finance business will be undertaken by Equitas Housing Finance Pvt Ltd (EHFPL). The holding company will hold the common capital and infuse capital into the subsidiaries.
Equitas Holdings, headquartered in Chennai, operates its three businesses through more than 350 branches across nine Indian states and has a borrower base of more than 1.3 million and a loan portfolio of $212 million.
Spark Capital Advisors was the advisor to Equitas Holdings.
Other stakeholders in the company include AMM Arunachalam & Sons, Aavishkaar Goodwell India Microfinance Development Co, SIDBI, Bellwether Microfinance Fund, Canaan Advisors, Sequoia Capital India III, Westbridge Ventures II and Aquarius Investment Advisors.
The investors and banks are taking a second and renewed look at the sector owing to a better clarity in the industry. The sector is receiving a lot of activity through investments, private placements and securitisations.
In September, Royal Bank of Scotland picked up 6.8 per cent stake in SKS Microfinance, the country’s erstwhile largest microfinance firm in a deal worth Rs 58.7 crore ($10.8 million) through an open market transaction.
Around the same time, Bangalore-based Ujjivan Financial Services Pvt Ltd, a microfinance institution focused on India’s urban poor, raised Rs 45 crore ($8.3 million) in equity capital from IFC as part of its two-tiered fifth round of funding.
Allahabad-based micro finance institution Sonata Finance Pvt Ltd has closed its Series D equity raising of Rs 35 crore or $6.35 million, led by Chicago-based Creation Investments. (See: Allahabad MFI Sonata Finance raises $6.35M from Creation Investments, others).
In July, SKS Microfinance had closed its qualified institutional placement (QIP), raising Rs 230 crore ($42 million) as the first tranche of a much larger fundraising plan announced last year.
(Edited by Prem Udayabhanu)
Equitas Micro Finance Pvt. Ltd. (formerly known as Singhivi Investment and Finance Pvt. Ltd.) is engaged in micro finance business. It offers commercial vehicle finance, loan against property and loan for small industry. The company was incorporated in 1994 and is based in Chennai, Tamil Nadu. Equitas Micro Finance Pvt. Ltd. operates as a wholly owned subsidiary of Equitas Holdings Pvt. Ltd.
International Finance Corp. is the private equity and venture capital arm of World Bank. It provides capital to early stage companies operating in emerging markets such as Africa, East Asia, South Asia, Eastern Europe, Latin America and the Middle East countries. The firm seeks to invest in finance, oil and energy, manufacturing, healthcare, electronics, auto parts, education, information technology, engineering, logistics, agricultural and pharmaceutical sectors. The firm also offers loans, structured finance, risk management, trade finance and local currency financing services. International Finance Corp. is based in Washington DC, United States of America with additional offices in East Asia and the Pacific, MENA regions, Latin America and the Caribbean, South Asia, Western Europe and Sub-Saharan Africa.