Private equity major Warburg Pincus is picking up a stake in Jaipur-based AU Financiers (India) Private Limited for $50 million (Rs 250 crore), said a source familiar with the development. The privately held non-banking finance company (NBFC) is involved primarily in commercial vehicles and SME loans.
The firm has earlier raised funding from Motilal Oswal's private equity fund and World Bank arm International Finance Corporation (IFC).
"Thank you for your interest in Warburg Pincus. The firm is bound by internal operational policies, which does not allow discussion of deal related investment activities. Warburg Pincus is unable to share any views regarding your queries," a Warburg Pincus spokesperson said in an email response to VCCircle.
AU Financiers is promoted by first generation entrepreneur Sanjay Agarwal. It also provides vehicle loans, business loans against property and small loans to customers mainly in semi-urban and rural areas. As of June 2011, the company had a loan portfolio of Rs 1,508 crore.
Currently, AU Financiers mainly operates in Rajasthan and is expanding to other states like Maharashtra, Gujarat, Punjab, Goa and Madhya Pradesh. It has also expanded into housing finance recently, when it received the license from National Housing Bank. These operations are carried out by its subsidiary, AU Housing Finance Private Ltd.
For FY11, revenues and profit after tax (PAT) of AU Financiers jumped over three times to Rs 159 crore and Rs 42 crore, respectively. During Q1FY12, the company reported PAT of Rs 7 crore on a total income of Rs 49 crore as compared to PAT of Rs 3 crore on total income of Rs 19 crore in Q1FY11, according to report by credit rating agency Care.
AU Financiers raised Rs 55 crore in equity funding from IFC and Motilal Oswal's India Business Excellence Fund (IBEF) in 2010. It had also raised Rs 20 crore from Motilal Oswal in 2008.
The deal comes soon after another NBFC, Murugappa Group’s Cholamandalam Investment & Finance Co Ltd, said that it is raising Rs 212 crore from private equity firms Multiples Alternate Asset Management and Creador Capital.Cholamandalam is primarily involved in vehicle financing and currently focuses on light commercial and small commercial vehicles (LCVs and SCVs).