International Finance Corporation (IFC) is planning to invest up to $12 million or a little over Rs 60 crore in Ahmedabad-based MAS Financial Services Ltd. The investment in the non banking financing company (NBFC) could be through compulsorily convertible preference shares (CCPS).
IFC has an existing exposure in a few other NBFCs including Rajasthan-based Au Financiers, which recently attracted a $50 million round led by private equity major Warburg Pincus. Last year, it also invested in Kolkata-based NBFC Magma Fincorp along with KKR.
MAS Financial Services provides loans to micro, small and medium enterprises (MSMEs) besides two wheelers, three wheelers and commercial vehicles. The company has also ventured into housing finance for low income segments in rural areas through its subsidiary MAS Rural Housing & Mortgage Financing Ltd.
The company currently operates through 70 branches, most of which are in rural and semi-urban areas, across Gujarat, Maharashtra and Rajasthan. MAS Financial Services had assets under management of Rs 521 crore with over 4 lakh customers as of March 2011.
MAS Financial is promoted by Kamlesh Gandhi (founder and managing director) and his brother Mukesh Gandhi (co-founder and director finance). The latter is also the chairman of Gujarat Finance Company Association (GFCA) & committee member of Finance Industry Development Council (FIDC).
In 2008, MAS Financial Services had raised mezzanine funding from ICICI Venture to the tune of Rs 40 crore. The company also counts Dutch development bank FMO and Bellwether Micro Finance Fund as equity investors, according to its website.
But, as per IFC disclosure, promoters now own 100 per cent stake in the company.
The company has also raised over Rs 63 crore through non-convertible debentures (NCDs) in the last two years.