Religare Finvest Ltd (RFL), an NBFC focused on small and medium enterprises and a wholly owned subsidiary of Religare Enterprises Ltd, is raising Rs 200 crore from private equity firm NYLIM Jacob Ballas Fund III, the company has disclosed in a statement to the Bombay Stock Exchange. The investment will be done through compulsory convertible preference shares.
This is the second PE fundraising by RFL within the past two months. In November 2010, it had raised Rs 150 crore from Avigo Capital Partners, a mid-market private equity firm. Avigo also invested through compulsory convertible preference shares.
Incidentally, the company also raised Rs 754 crore from retail issue of non-convertible debentures. In a filing to SEBI for listing NCDs, the company said that the income from its financing activities was the largest component of its total income and constituted 75.09 per cent and 78.98 per cent of its total income in fiscal 2010 and fiscal 2011, respectively.
The three-year-old company provides various lending solutions to SMEs including loan against property, commercial assets, marketable securities and plant & machinery, as well as unsecured working capital finance. It also runs a retail capital markets financing business that offers loan against shares and ESOP funding. Currently, the financial services firm has 39 branches across all major cities and claims to be growing to a book size of over $2 billion.
The most high profile PE investment in an NBFC during 2010 had been in Indostar Capital, which raised nearly $200 million in commitments from investors like Ashmore Group Plc, Everstone Capital Management, Baer Capital and CDIB Capital, besides Goldman. The company’s team includes former senior executives of Aegon India and Bank of America Merrill Lynch India, among others.
Another significant deal took place last year when private equity giant Kohlberg Kravis Roberts & Co. L.P. (KKR), along with International Finance Corporation (IFC), invested Rs 440 crore ($100 million) in Kolkata-based non-banking finance company Magma Fincorp. KKR also operates an NBFC in India that has concluded deals with Max India’s Analjit Singh, JSW’s Sajjan Jindal and the Coffee Day Group.
NYLIM Jacob Ballas India Fund III, LLC specialises in growth capital investments. The fund seeks to invest more than 50 per cent of its capital in infrastructure and typically invests between $15 million and $60 million per deal.
Most recently, Jacob Ballas invested Rs 67 crore in Hyderabad-based manufacturer and exporter of specialty chemicals and pharmaceuticals Vivimed Labs Ltd. It co-invested, along with Kitara Capital, in the public-listed firm.