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Equitas raises $53M led by DEG and impact investment firm Creations

Chennai-based microfinance and micro-housing finance company Equitas Holdings Pvt Ltd (formerly Equitas Micro Finance India Pvt Ltd) has raised Rs 325 crore ($52.5 million) from a consortium of six investors, as per a disclosure.

The funding round was led by two new investors—German development finance company DEG, which brought around Rs 100 crore, and impact investment firm Creation Investments (Creations), which invested approximately Rs 113 crore through Creation Investments Equitas Holdings, LLC.

For Creations this marks the fourth Indian portfolio firm after backing Grameen Financial Services (Grameen Koota), Eko India and Sonata Microfinance.

Three other development finance and multilateral investment firms Netherlands Development Finance Company (FMO), International Finance Corporation (IFC), Commonwealth Development Corporation (CDC) besides India Financial Inclusion Fund (IFIF), a fund managed by impact investment firm Caspian, brought in the rest of the money into Equitas.

The deal valued the microfinance company at around Rs 2,000 crore, it said.

Founded in 2007 by PN Vasudevan, Equitas offers micro credit to people who are otherwise unable to access finance from the mainstream banking channels. The firm provides loan to poor rural, urban and deprived women for income generating activities like trading, animal husbandry, agricultural production and transportation.

Equitas operates its three businesses through more than 336 branches across seven Indian states and have a customer base of 1.2 million.

Three years ago Equitas had transferred its microfinance business to Singhvi Investment & Finance (SFPL) which was renamed as Equitas Micro Finance India. The parent company was renamed as 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, WestBridge, Helion and Aquarius Investment Advisors.

JSA acted as the legal advisor to Equitas on the latest deal.

Equitas is one of the largest MFIs in the country behind names like Bandhan and SKS Microfinance.

It has raised over $100 million spread over various tranches.

(Edited by Joby Puthuparampil Johnson)

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