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Standard Chartered PE invests in IFMR Capital

20 December, 2016

Chennai-based non-banking financial company (NBFC) IFMR Capital Finance Pvt. Ltd has raised $50 million (around Rs 340 crore) in a fresh deal from Standard Chartered Private Equity (SCPE), almost a month after getting a $25 million funding from Eight Road Ventures in early November.

The fresh round of investment will help the company strengthen its business in unbanked sectors, including affordable housing finance, small business, vehicle finance, agriculture finance and microfinance as well as diversify into new sectors and products, it said in a statement.

VCCircle had first reported on 1 December that Standard Chartered PE is in talks to invest in IFMR Capital in a fresh deal and existing investor LeapFrog Investments is again looking at a partial stake sale.

LeapFrog—which invested $29 million—sold a second partial stake in the company in the deal and remains key investor in the business, the company said in the statement.

IFMR Capital has, to date, facilitated debt financing of more than $6 billion to over 100 institutions across microfinance, affordable housing finance, small business loans, agriculture finance, vehicle finance and fintech in the country.

The first tranche of $17 million from SCPE has already been completed, taking the total funds raised by IFMR Capital to $104 million since 2014. SCPE is the private equity arm of Standard Chartered Bank.                                  

Since inception in 2008, IFMR Capital has enabled over 100 financial institutions (originators) to raise debt from the capital market. The firm has served over 25 million individuals in more than 500 districts in the country, it said.

Kshama Fernandes, managing director and CEO, IFMR Capital, said, “SCPE’s equity investment will strengthen our ability to work with a much larger number of originators across asset classes in the coming years and make access to financial services a reality for millions of low-income households and small enterprises in India.”

“The closure of this equity round with Eight Roads and SCPE empowers IFMR Capital to build new frontiers in capital markets for financial inclusion, including building out new investor markets as well as driving liquidity and most efficient price discovery in these markets.” said Sucharita Mukherjee, CEO, IFMR Holdings and vice chairperson, IFMR Trust.

In November, the company raised $25 million (around Rs 168 crore) when LeapFrog made its first partial exit. Kabir Narang, partner and head of technology and financial services at Eight Roads Ventures India, joined the board of IFMR Capital.

Since inception, SCPE has invested over $6 billion in over 100 companies. Standard Chartered PE has not invested in the financial services space in India for the last seven years but had backed a bunch of firms in the sector previously.

With investments in Africa and Asia, LeapFrog said its investee companies has grown an average of 43% annually over the past three years and has a presence in 22 markets. LeapFrog’s other investments in India include Mahindra Insurance Brokers, Magma Fincorp and Shriram Distribution CCL.

Debt funds

IFMR Capital has also launched three domestic alternative investment funds offering mid- to long-term debt funding to these originators.

IFMR Investments, the wholly-owned subsidiary of IFMR Capital, is also in the process of closing its second debt fund. In July, the company said it is looking to extend the timeline by a few months after receiving an enthusiastic response from investors.

The IFMR FImpact Long Term Multi Asset Class Fund had a target of raising Rs 250 crore by the end of June but it surpassed the mark in April itself.

It had raised Rs 306 crore and deployed Rs 264 crore, said Fernandes in an earlier interaction.

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Standard Chartered PE invests in IFMR Capital

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