Niyogin Fintech Ltd, formerly known as M3 Global Finance Ltd, is raising Rs 235 crore ($36 million) via a preferential issue of shares to investors such as Hong Kong-based investment firm Ward Ferry and Sabre Capital.
Lucky Investment Managers Pvt. Ltd, Alchemy Capital Management Pvt. Ltd and Alchemy India Long Term Fund Ltd are among the other investors, the Mumbai-based non-banking financial company said in a statement.
The company said it is issuing the shares at Rs 50 apiece. That’s nearly triple the Rs 17.35 price at which its shares traded on the BSE on Tuesday.
The company’s shares are traded under the capital markets regulator Securities and Exchange Board of India’s periodic call auction norms for illiquid stocks.
The preferential shares will constitute more than 50% of the fully diluted capital of the company. After the transaction, Niyogin’s promoters will hold less than 40% stake in the company on a fully diluted basis.
Its promoters—Amit Rajpal and Gaurav Patnakar—had acquired the company late last year. Rajpal is a partner and portfolio manager at hedge fund Marshall Wace in the Hong Kong office. Patnakar worked with The Boston Company Asset Management in New York until 2016 and is a freelance consultant now.
Since acquiring the company, they have infused about Rs 40 crore through an issue of convertible securities to promoters and non-promoters, revamped the board of directors and tied up with technology providers, Niyogin said.
Rajpal, the company’s chairman, said that Niyogin is being “re-tooled” as a new-age NBFC which will use technology to reach out to relatively less penetrated parts of the country. The company will focus on micro, small and medium enterprises, which remain underserved in terms of availability of credit and other financial products. The company is also planing to integrate with a pan-India network of partners for distribution and monitoring of credit.
Equirus Capital acted as the sole financial adviser on the transaction.
Niyogin joins a bunch of fintech firms such as InCred Finance, FlexiLoans, SMECorner and LendingKart in raising capital in recent months.