Jalandhar-based Capital Small Finance Bank has raised Rs 84 crore ($12 milion) from Oman India Joint Investment Fund (OIJIF), the company said on Tuesday.
The private equity firm, through its second fund, has picked a 9.9% stake in the bank.
Previously, Bengaluru-based mid-market private equity fund Amicus Capital had invested in the small finance bank.
Pi Ventures LLP, an existing investor, also participated in the current round. The bank's other investors include HDFC Life, ICICI Prudential Life and Small Industries Development Bank of India (SIDBI).
The firm founded by Sarvjit Singh Samra in the year 2000 started as a Local Area Bank. Capital SFB started operations as small finance bank on April 24, 2016 after it converted from a Local Area Bank.
Sarvjit Singh Samra, founder and managing director, Capital Small Finance Bank, said, “Capital Small Finance Bank has grown consistently since inception and holds a market leadership position in the state of Punjab. The current round of capital-raise will help the bank deepen its penetration in Punjab and expand rapidly into the states of Haryana, Rajasthan and NCT-Delhi with a significant focus on MSME loans.''.
The bank provides a variety of services to its customers through a network of more than 150 branches in Punjab and neighbouring states.
Its loan book comprises of agriculture loans, MSME loans, mortgage loans, personal loans, and auto loans with a strong focus on agriculture and MSME sector.
Capital SFB has grown its loan book from Rs 1,150 crore in 2015-16 to Rs 3,026 crore as on September 30, 2019.
During the same period, its deposits have grown from Rs 1,810 crore to Rs 4,107 crore.
OIJIF, set up in 2010, is currently investing out of its second fund.
The fund is co-sponsored by State Bank of India (SBI) and State General Reserve Fund of Oman (SGRF).
The Capital SFB deal marks OIJIF’s fifth transaction from the second fund.
The other investments from OIJIF II include Divgi TorqTransfer, Stanley Lifestyle, Annapurna Finance and PNB MetLife.
Srinath S, CEO, Oman India Joint Investment Fund II, said, “Capital SFB has all the right ingredients (a low-cost liability franchise, low GNPAs, high CASA ratio, diversified product profile and a stable management team) required to be successful in the Indian banking space.''
Edelweiss was the sole financial advisor to the bank for the transaction.