Bangalore-based microlender Janalakshmi Financial Services Pvt Ltd (JFS) has raised Rs 177 crore ($27.7 million) through non-convertible debentures (NCDs) and an unsecured term loan, according to a press release.
The MFI raised Rs 150 crore ($23.5 million) via senior secured NCDs from an unnamed mutual fund besides Rs 27 crore ($4.2 million) through an unsecured term loan transaction from non-banking finance company IFMR Capital.
The NCDs comprises three different bunches of Rs 50 crore each with varying tenures, with a maximum tenure of four years.
“This is the largest single investor subscription to NCDs issued by JFS. Most microfinance institutions are primarily funded by banks and private equity players and it is therefore critical for MFIs to diversify their sources of funding,” said V S Radhakrishnan, CEO, JFS.
The funding will help Janalakshmi create loan assets and provide the flexibility to securitise them.
Talking about the unsecured loan, Kshama Fernandes, CEO, IFMR Capital, said: “This is a first of its kind product from the IFMR Capital stable. The product meets a specific gap in the sector vis-a-vis access to unsecured sources of capital, besides providing the much sought after diversification.”
Janalakshmi was incorporated in July 2006 and took over micro finance business from Jana Urban Foundation (then known as Janalakshmi Social Service) with effect from April 1, 2008 on receipt of NBFC licence from the RBI. It is promoted by Ramesh Ramanathan, former MD and European Head of Corporate Derivatives at Citibank.
Last November, the company raised funding from TPG besides existing investors including Alpha TC Holdings, a fund backed by Mizuho Securities and managed by Tata Capital, and others.