<article>Small finance bank licence holder <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=rgvn">RGVN Microfinance</a> (North East) Ltd has cut foreign stake in the firm from 68% to 48% by raising Rs109 crore from investors including Ratan Tata and <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=sidbi">SIDBI Trustee Co. Ltd.</a></article>

Small finance bank licence holder <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=rgvn">RGVN Microfinance</a> (North East) Ltd has cut foreign stake in the firm from 68% to 48% by raising Rs109 crore from investors including Ratan Tata and <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=sidbi">SIDBI Trustee Co. Ltd.</a>
RGVN will now apply for the final permit to start a small finance bank. According to <a href="http://www.dealstreetasia.com/?s=rbi">Reserve Bank of India (RBI) </a>norms, these banks can have a maximum foreign holding of 49%.
“Domestic investors including RNT Associates and SIDBI Trustee Co. Ltd have invested Rs40 crore each, while Pi Ventures LLP has invested Rs20 crore. Existing foreign shareholder Norwegian Microfinance Initiative (NMI) has invested Rs9 crore,” said Rupali Kalita, managing director of RGVN.
Tata Sons Ltd chairman emeritus Ratan Tata has been investing in various start-ups through his privately held investment firm, RNT associates. RNT has invested in Snapdeal (Jasper Infotech Pvt. Ltd), cab-hailing service Ola (ANI Technologies Pvt. Ltd), e-ticketing start-up Kyazoonga and many others across sectors. Since most microfinance institutions have a foreign holding of 70-80%, those turning small finance banks are bringing down foreign holding to comply with central bank norms.
“We will start banking operations by mid-April. We will diversify towards other products like housing and small commercial vehicles segment in our journey. We will have products around deposit-linked loans and savings-linked loans. In the next five years, we expect our loan book to exceed Rs2,000 crore,” added Kalita.
RGVN will raise nearly Rs17 crore from SIDBI and Dia Vikas Capital in the coming round next week, Kalita said.
Dia Vikas Capital has been associated with the company since 2011. Emails sent to Dia Vikas Capital and SIDBI Venture Capital Ltd remained unanswered.
RGVN had a loan portfolio of Rs583 crore at the end of the December quarter, registering a 63% growth year on year. It has 136 branches spread across Assam, Arunachal Pradesh, Meghalaya, Nagaland, Tripura, West Bengal and Sikkim.
Disha Microfin Ltd, too, reduced its foreign shareholding before applying for a final nod. Fincare Business Services Ltd, a holding company of Disha Microfin, raised Rs500 crore from private equity investors TA Associates, True North, Tata Opportunities Fund and LeapFrog Investments before applying for final nod, Mint reported on 7 March. This helped reduce its foreign shareholding to 49% compared with 72% earlier.
Among 10 small finance bank licence holders, six entities have started operations. The in-principle approval lapses in March, which implies that licence holders need to apply before it.
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<h4 style="text-align: justify;">This article was first published on <a href="http://www.livemint.com/Industry/xTn2in62eCs0cl9xlOc5JL/RGVN-Microfinance-reduces-foreign-stake-to-48-to-comply-wit.html">Livemint.com</a></h4>

RGVN Microfinance (North East) Ltd cuts foreign stake from 68% to 48% by raising Rs109 crore from investors including Ratan Tata and SIDBI Trustee Co. Ltd.

India: RGVN Microfinance reduces foreign stake to 48% to comply with RBI norms

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India: RGVN Microfinance reduces foreign stake to 48% to comply with RBI norms

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