At present, IntelleGrow provides cash flow-based debt to early-stage, high-risk and under-banked companies in India, especially in the social impact sector.
“We are looking to launch an AIF this year to meet certain needs of our customers,” Intellegrow CEO Akbar Khan told DEALSTREETASIA.
As compared to an NBFC, an Alternate Investment fund (AIF) is a SEBI-regulated investment vehicle, which is established to pool in funds for investment, which could be in the form of venture capital, private equity, hedge funds, real estate investment trusts, among others.
“The plan for the AIF is that Intellegrow will be the fund manager. We are going to go out and raise capital from a different class of investors not our equity investors, but investors who are looking for looking for exposures to SMEs,” said Khan.
“For us its a relatively easy extension to what we are doing right now,” he said adding that the new debt fund will help the firm to provide longer term loans, which were also seeing a good demand
“When we lend from our balance sheet we lend for about 24-36 months. Our sourcing and servicing from our debt pools can go up to 48 months. From our AIF we would like to do longer dated loans for our customers,” said Khan.
The fund will also help the firm to provide an additional credit product offering to its high rating clients, making it complementary to its current loan offerings.
Though the plans are still at the preliminary stage and the final corpus is yet to be finalised, Intellegrow is already in talks with investors for the fund, which is likely to be closed by December.
In June last year, the company had raised $20 million in equity and long-term debt from Triodos, Developing World Markets, Omidyar Network and Calvert Foundation and Overseas Pvt. Investment Corp. Prior to that, in February 2016, it had raised $8 million from Calvert Foundation, a US-based community development financial institution.