Bangalore-bsed microfinance entity Grameen Financial Services Pvt Ltd (Grameen Koota) has raised Rs 20 crore from MicroVest I, LP (MV I), a US-based private equity fund. With this deal, Microvest has made its debut investment in India.
The fund is raised as debt capital through an issuance of secured, redeemable, non-convertible debentures (NCDs), said the company in a statement.
This is the second instance of fund-raising by Grameen Koota in the last two months. In December 2009, the firm raised Rs 25 crore jointly from Luxembourg's MicroVentures Investments, Italy's MicroVentures SPA and Belgium-based Incofin. It also raised PE funding of Rs 11.70 crore from Aavishkaar Goodwell earlier.
Suresh Krishna, managing director of Grameen Koota, stated that the transaction was very critical from the perspective of diversified funding.
MicroVest provides debt and equity capital to microfinance institutions in emerging markets, and the fund is registered as a foreign institutional investor (FII) with the SEBI.
Grameen Koota currently has Rs 185 crore under management, with a client base of over 3.3 lakh spread across 33 districts in Karnataka, Maharashtra and Tamil Nadu. It also targets to expand its reach to 20 lakh households across Madhya Pradesh, TN and Andhra Pradesh by 2012.
Unitus Capital acted as the financial advisor in the transaction.
NCD issues, which started with the larger MFIs in India, seem to be gaining traction among the mid-sized and smaller players also. The first instance came when SKS Microfinance raised Rs 75 crore NCDs in May 2009. It was followed by Spandana Sphoorty Financial raising Rs 80 crore through the NCD route.