Non-banking finance company Karvy Financial Services Ltd is mulling to raise around Rs 600 crore ($98 million) and is in talks with 3-4 private equity firms to scoop up the money over the next six months, The Economic Times reported citing Amit Saxena, chief executive of Karvy Financial.
The company, which specialises in offering small-tickets loans against gold and property and finances purchase of commercial vehicles to SMEs, is directly dealing with a group of overseas PE investors and has not appointed any investment banker for the fund raising purpose, the paper said.
Saxena did not divulge further details on the stake the company is planning to dilute, but told the paper that the company may also issue Rs 100-crore of non-convertible debentures.
Presently, Karvy Financial meets half of its funding requirements from bank loans while remaining via non-convertible debentures, commercial papers and other instruments.
Karvy Group's NBFC arm expects its loan book to quadruple to Rs 7,000-8,000 crore over the next 3-4 years from about Rs 2,000 crore at present, on the back of an expected increase in loan demand going forward.
Mumbai-based Karvy Financial provides structured finance, loan against purchase of securities, promoter funding, initial public offer funding, commodity funding, secured business loans against property, gold loans, loans against small commercial vehicle.
The average loan size of the company is about Rs 18 lakh for business credit, Rs 1 lakh for gold loans and Rs 5 lakh for commercial vehicles. It lends to SMEs with an average ticket size of Rs 1.3 crore.
NBFC as a space has attracted a lot of private capital from both PE and VC firms. Some names include Magma Fincorp, AU Financiers, Cholamandalam Investment, NeoGrowth, DMI Finance etc.