Ahmedabad-based MAS Financial Services has raised an undisclosed amount in growth capital from German development financial institution Deutsche Investitions- und Entwicklungsgesellschaft mbH or DEG.
MAS is a non-banking financial company focused on micro enterprises/MSME loans, two-wheeler loans, commercial vehicle and affordable housing finance. The retail finance company has operations in Gujarat, Maharashtra, Rajasthan, Madhya Pradesh (Indore), Tamil Nadu (Chennai) and Karnataka (Bangalore), with its 71 branches spread across more than 2,500 locations, as per its website. The company is promoted by Kamlesh Gandhi (founder and managing director) and his brother Mukesh Gandhi (co-founder and director finance).
MAS Financial had earlier raised Rs 40 crore from ICICI Venture Fund through a mezzanine funding deal in 2008 in the form of redeemable preference shares. The NBFC had also raised funds from Dutch financial institution Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. or FMO, which put in Rs 43.47 crore in equity through compulsorily convertible preference shares (CCPS).
Earlier reports indicated that ICICI Venture has exited in the latest transaction with DEG although this could not be independently verified. MAS Financial does not appear among the portfolio companies on the ICICI Venture website. But it is not clear if the entire transaction with DEG was a secondary transaction involving the exit of ICICI Venture or had a primary component that brought in fresh cash for MAS Financial.
“NBFCs focusing on retail-MSME lending happen to be one of the fastest growing sectors in the Indian financial services industry. MAS Financial is a leading NBFC in Gujarat and it is currently expanding into other logical commercial hubs across India. With a sound business model, prudent capital-raising, robust risk management strategy and flawless execution, it has all the constituents required to create a leadership position in the NBFC segment,” Kaushal Aggarwal, managing director at Avendus Capital – the sole advisor to MAS Financial in the deal – stated in a Press release.
The entry of DEG comes at a time when IFC is also planning to invest up to $12 million or a little over Rs 60 crore in MAS Financial through 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, too, it invested in Kolkata-based NBFC Magma Fincorp, along with KKR.
(Edited by Sanghamitra Mandal)