Bangalore-based microfinance firm Ujjivan Financial Services Pvt Ltd has raised Rs 127.9 crore ($25.5 million) in its fifth round of equity funding, led by Wolfensohn Capital Partners and FMO (Netherlands Development Finance Company or Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.).
Existing investors including Lok Capital, India Financial Inclusion Fund (Caspian Advisors), Sequoia Capital, Mauritius Unitus Corporation and Elevar Equity also participated in the round. Kotak Investment Banking was the advisor and arranger of the transaction.
This is the first investment by Wolfensohn Capital, promoted by former World Bank president James D. Wolfensohn, in the Indian microfinance sector.
“This round of equity funding will make Ujjivan one of the best capitalised MFIs in the country,” said Samit Ghosh, managing director & CEO of Ujjivan. Coming after its last round in 2009, this funding will double the capitalisation of Ujjivan to Rs 230 crore.
The additional capital will help increase the loan book from the current Rs 600 crore to around Rs 1600 crore, given RBI’s 15 per cent capital adequacy requirement for NBFC-MFIs.
Since January last year, Ujjivan has raised Rs 124 crore through private placements of non-convertible debentures (NCDs) with investors like Developing World Markets (DWM) and Standard Chartered Bank. Ujjivan also raised over Rs 100 crore in debt funding from a set of public and private sector banks, including SIDBI, among others.
Founded by Samit Ghosh, Ujjivan is headquartered in Bangalore with offices in New Delhi, Kolkata and Pune. As of March 2011, it operates a network of 302 branches in 20 states.
Ujjivan has a portfolio of Rs 625.14 crore and has disbursed loans worth Rs 1,141 crore in FY11. The firm reported a net profit of Rs 11.4 crore and total income of Rs 108.8 crore in FY11.