Mid-market growth capital firm Amicus Capital has invested Rs 70 crore (nearly $10 million at current exchange rates) in Berar Finance Ltd, which runs a two-wheeler-focussed financing unit.
The Nagpur-based company will use the funds to expand its branch network, diversify its product offerings, achieve its growth targets and lower the cost of borrowings, Berar said in a statement.
The funding marks the first institutional capital infusion into Berar, the statement added.
“The company has a strong track record of growth and profitability, a high-quality loan book and one of the few NBFCs with a deposit-taking license,” Amicus Capital co-founder and partner Mahesh Parasuraman said.
The development comes just two weeks after VCCircle exclusively reported that Amicus was set to invest in a non-bank lender. The investment marks the private equity firm’s second bet on a financial services company. In July last year, the firm backed Jalandhar, Punjab-based Capital Small Finance Bank in its first investment in the sector.
Berar Finance, which was set up by Maroti G Jawanjar in 1990, has a presence in six states including Maharashtra, Chhattisgarh, Madhya Pradesh, Gujarat, Karnataka and Telangana.
Separately, Jawanjar said the firm would use the funding to help it achieve its target of becoming one of the country’s leading vehicle financing companies. Currently, Berar Finance has a network of 61 branches.
The privately held non-banking finance company accepts public deposits. Apart from two-wheeler loans, Berar also provides financing for cars, commercial vehicles and agriculture equipment.
Berar’s net profit rose to Rs 14.72 crore for the year through March 2019 from Rs 12.38 crore the year before license while net interest income grew to Rs 46.46 crore from Rs 36.87 crore, according to an October 2019 report by ICRA Ltd. The company had a loan book of Rs 363.55 crore as of March 31, 2019.
Amicus, meanwhile, was launched by Sunil Vasudevan, a former partner at India Value Fund Advisors, which is now known as True North. Parasuraman, a former managing director at US-based PE firm Carlyle Group, joined Amicus in 2015.
The PE firm had hit the first close of its maiden fund at $90 million, VCCircle reported in December 2016. It had a target to raise $200 million for the fund. The PE firm has also invested in digital insurance platform RenewBuy and kitchen appliances and cookware firm Wonderchef.