Mumbai-based Suryoday Small Finance Bank Ltd on Wednesday said it has raised Rs 248 crore ($35.8 million) from three promoters and a clutch of existing and two new investors.
The new investors who participated in the funding round are DEG, a development finance institution and a subsidiary of the German KfW Group, and Kotak Mahindra Life Insurance Company, said Suryoday Small Finance Bank in a statement. Post this round, the company has 20 institutional investors, it added.
Its other shareholders include impact investor Lok Capital Group, private equity firm Gaja Capital, Swiss investor responsibility Investments, India-focused fund-of-funds Evolvence India Fund II and HDFC Group.
“This growth capital comes in just as we start the new financial year and provides us with a strong backing to pursue our business plans,” said R Baskar Babu, managing director and chief executive, Suryoday.
In November last year, the World Bank’s investment arm, the International Finance Corporation (IFC), had proposed to offer up to $20 million (Rs 140 crore) to Suryoday in subordinated debt. At that time VCCircle had reported that the company was in talks to raise debt and equity funding as part of its efforts to grow its loan book.
Suryoday, which commenced banking operations in January 2017, was one of the 10 companies to get in-principle approval from the Reserve Bank of India (RBI) in September 2015 to launch a small finance bank. The bank has over 380 branches/doorstep-centres across 10 states and Union Territories in the country.
Other small finance banks have also been raising capital in past months. In October last year, ESAF Small Finance Bank raised capital from several insurance companies such as PNB MetLife India Insurance, Bajaj Allianz Life Insurance and ICICI Lombard General Insurance.
In May last year, Singapore state investment arm Temasek struck a deal to pick up a stake of around 4.8% in AU Small Finance Bank Ltd, which went public in 2017.
Other small finance banks Equitas Holdings Pvt Ltd and Ujjivan Financial Services Ltd also went public in 2016, complying with RBI regulations that make it mandatory for small finance banks to be 51% owned by domestic shareholders.