Satya MicroCapital Ltd, a New Delhi-based non-banking financial company (NBFC), has raised Rs 11.48 crore ($1.7 million) from existing investors through a rights issue.
The company said in a statement that it allotted 25.51 lakh shares at Rs 45 apiece to 107 investors.
Satya MicroCapital plans to use the proceeds to expand its presence and build its portfolio of assets under management in both existing as well as new geographies.
The firm provides loans to low-income entrepreneurs in rural and urban areas.
Its Joint Liability Group (JLG) model mainly focuses on women, with their husbands acting as co-borrowers through a credit product that allows them to start a new business or build their existing business.
A JLG is typically a group of 5-10 individuals jointly seeking a loan.
“Having covered major rural areas in seven states, we now plan to venture into the less financially penetrated states and take our offerings to the country’s masses,” said a Satya MicroCapital spokesperson.
Satya MicroCapital was floated by Vivek Tiwari, who is the firm’s managing director. In his previous job, he was chief operating officer at microfinance institution Satin Creditcare Network Ltd.
He bought TFC Finvest Ltd, a New Delhi-based NBFC and rebranded it as Satya MicroCapital.
Satya MicroCapital started its microfinance operations in October 2016.
The gross loan portfolio of the company grew from Rs 26 crore in the financial year 2016-17 to Rs 219 crore in 2017-18, according to the recent report by industry body MicroFinance Institutions Network.
Satya MicroCapital has a presence in seven states through a network of 42 branches. The seven states are Bihar, Chhattisgarh, Haryana, Punjab, Rajasthan, Uttar Pradesh, and Uttarakhand.
In October last year, VCCircle reported that Satya MicroCapital had raised Rs 16 crore ($2.4 million) from impact investor Dia Vikas Capital by selling around 25% stake in the company.
Another microfinance institution, Annapurna Finance, had earlier this month raised Rs 155 crore ($23 million) from mid-market private equity firm Oman India Joint Investment Fund.