Affirma Capital leads $47 mn equity round in Muthoot’s microlending arm
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Singapore-based Affirma Capital, the emerging market private equity firm spun out of Standard Chartered PE, has led an investment round of Rs 350 crore (around $47 million) into Belstar Microfinance Ltd, a subsidiary of Muthoot Finance Ltd.  

The private equity firm joins existing investors Muthoot Finance and Maj Invest to invest Rs300 crore (around $40 million) of the total funding to pick up an 18.45% stake in the microlender. 

Affirma Capital’s managing director Vijay Nallan Chakravarthi will join Belstar’s board as part of the deal. 

This is the second PE investment in Belstar, with Maj Invest investing in 2018.  

Maj Invest, which had held an 11.05% stake, is also infusing Rs 22 crore while Muthoot Finance is financing Rs 28 crore.

Maj Invest, a Denmark-based asset management firm with about $17 billion worth of assets under management (AUM), had previously invested in Chennai-based Belstar in late 2018.

After the capital infusion, its stake will reduce to 10.02%.  

In 2016, as part of its diversification, Muthoot Finance had made an initial investment of Rs 40 crore in Belstar Investment and Finance Pvt Ltd and also acquired foreign investors’ stake to own 64.60% making it a subsidiary.

Over the years, it increased the stake in Belstar to more than 70%. With this transaction, Muthoot Finance’s shareholding will reduce to 57.89%.  

The transaction also includes a secondary offer for sale of shares by Belstar’s promoters and Muthoot Finance of Rs20 crore.

The promoter stake in the company will fall to 13.63% from 18.94%.  

“This funding will help Belstar to grow its loan book and accomplish its vision of becoming a socially responsible microfinance institution working towards entrepreneurship and economic empowerment of women,” George Alexander Muthoot, managing director at Muthoot Finance, said.

Belstar MD Kalpanaa Sankar, who has been leading the company since its inception, said the fresh investment during the Covid-19 pandemic “validates the large market opportunity in microfinance” and Belstar’s potential to capitalise on the opportunities.  

InteQuant Advisors was the sole financial adviser to the transaction, which is subject to obtaining regulatory approvals including from the Reserve Bank of India.

The cash transaction is expected to be completed within three months. 

Affirma Capital

Affirma Capital manages over $3.6 billion in assets for global limited partners and sovereign wealth funds. It is owned and operated by the former senior leadership of Standard Chartered PE.   

In its earlier avatar as Standard Chartered Private Equity, the fund started investing in India in 2004, according to VCCEdge. 

It invested in several mid to late-stage companies across a range of industries including pharmaceuticals, infrastructure and banking. 

Their previous investments in India include Northern Arc Capital, Mahindra and Mahindra Financial Services, Prodapt Solutions, Travel Boutique Online, Craftsman Automation, Tirupati Medicare and GMR Airports.  


Belstar Investment and Finance Pvt. Ltd (BIFPL) was incorporated in January 1988 at Bangalore and was registered as non-banking financial company in 2001.

It was acquired by the Hand in Hand India (HIH India) group in September 2008.  

In 2010, Belstar received equity Investment from NMI Frontier Fund, a Norwegian fund investing in emerging economies, along with other investors including International Finance Corporation (IFC), Swedish Development Finance Institution and Aavishkaar Goodwell.  

At present, Belstar operates through a network of 650 branches in 19 states, and has assets under management of over Rs 3,100 crore.  

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