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Kinara Capital raises $15 mn from Gaja Capital, others

13 October, 2017

Micro, small and medium enterprise-focussed non-banking financial company Kinara Capital has raised Rs 96 crore ($14.7 million) in a fresh round led by mid-market private equity firm Gaja Capital, a person with direct knowledge of the development told VCCircle.

New investor, Spanish impact investment firm Gawa Capital, and existing investors, Michael and Susan Dell Foundation, and Unitus Impact Fund, too, participated in the round, while Shriram City Union Finance has exited the company, the person added.

VCCircle had first reported that Gaja Capital, a new investor and some existing investors were to invest in Kinara Capital.

A spokesperson at Gaja Capital confirmed the development without revealing the financial details. An email query to Kinara Capital went unanswered till the time of filing this report.

Gopal Jain, managing partner at Gaja Capital, said Kinara Capital provides asset finance and working capital loans to MSMEs, addressing the “white spaces” that offer potential for high growth. “Kinara Capital is one of the fastest-growing NBFCs and has since inception demonstrated strong growth while maintaining healthy asset quality,” he said.

Kinara Capital, which is operated by Visage Holdings and Finance Pvt. Ltd, was founded by Hardika Shah in 2011. Shah, who spent several years as a management consultant, globally, started the company to provide collateral-free loans to small businesses. Kinara provides loans of Rs 1-15 lakh to MSMEs, filling the gap between microfinance and commercial capital.

According to a June 2017 CARE Ratings’ report, the company had turned profitable during 2015-16 following significant growth of its loan portfolio. It had increased its disbursement from Rs 31.3 crore in 2014-15 to Rs 70.4 crore in 2015-16, as a result of stable operations at its existing branches and addition of new ones.

Gaja Capital, which had marked the final close of its third fund at $240 million last year, focuses on the consumption segment, with an emphasis on education, financial services, consumer and healthcare sectors.

Its latest investment in the financial sector was in Suryoday Micro Finance, which had received a licence to set up a small finance bank. Gaja Capital had invested in Pune-based the company last year along with half-a-dozen other PE firms besides institutional investors. Its other portfolio firm in the financial segment is private lender RBL Bank, which was listed on the stock exchanges last year.

In an interaction with VCCircle last year, Imran Jafar, general partner at Gaja Capital, had said that the PE firm was prepared to invest slightly larger amounts in financial services from its third fund.

Its other investments from the third fund include frozen food specialty firm Bakers Circle and SportzVillage, which offers sports management services to schools.

*This article has been updated to add a comment from Gaja Capital.

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Kinara Capital raises $15 mn from Gaja Capital, others

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