Svasti Microfinance Pvt. Ltd has raised Rs 34 crore ($4.8 million) from a clutch of investors including Nordic Microfinance Initiative (NMI) and Serum Institute of India CEO Adar Poonawalla, the Mumbai-based lender said on Tuesday.
Svasti will use the capital to expand its branch network, increase its portfolio of loans to small and medium-sized companies, it said in a statement.
The lender will also use the money to provide other financial services such as consumer finance and insurance in partnership with other leading institutions.
“Over the next couple of years, Svasti will be a diversified financial services provider to millions of uncounted low and middle income households across India,” co-founder Arunkumar Padmanabhan said.
Svasti was co-founded by Padmanabhan and Narayanan Subramaniam in late 2010 by acquiring non-banking financial company Easy Housing and Finance Ltd.
The company aims to close the current financial year with a total portfolio of Rs 350 crore and is gearing up to double this to Rs 700 crore by March 2020. To finance these growth plans, Svasti plans to raise an additional Rs 100 crore in the next 12 months.
A portion of the funds raised in the new round will be used to provide exits to some early investors. Svasti’s early investors include The Michael & Susan Dell Foundation, Bamboo Capital Partners (previously Bamboo Finance), venture capitalist Sajid Fazalbhoy, investment banker and angel investor Rajiv Dadlani, and a few other individual investors.
Serum’s Poonawalla had previously invested in Svasti in 2015 and 2017. According to a December 2018 Care Ratings disclosure, the company received an equity infusion of Rs 11.70 crore from the Poonawala group during 2017-18.
As on September 30, 2018, the promoters held a stake of 18.07% in Svasti, institutional investors owned 69.88% and individual investors held 11.80%.
The Care Ratings report also said that about 84% of Svasti’s loan portfolio was spread in Maharashtra, followed by Gujarat and Madhya Pradesh. The lender services around 141,000 customers through 38 branches in four states.
Oslo, Norway-based NMI has invested in quite a few microlenders in India. These include Fusion Microfinance, Satin Creditcare, Utkarsh Microfinance and RGVN (North East) Microfinance. It exited Fusion in December by selling its stake to private equity firm Warburg Pincus.