Private equity (PE) firms Advent International and Multiples have together invested Rs 1,930 crore ($230 million) in Svatantra Microfin in a deal that marks the largest investment by institutional investors in India’s microfinance sector.
The investment follows Svatantra’s recent acquisition of Chaitanya India Fin Credit Limited. The combined entity is touted to be amongst the largest non-banking microfinance companies in India.
The current promoter group led by Ananya Birla will continue to have a significant majority stake, stated a media statement issued by the company.
Established in 2013, Svatantra provides affordable financial and non-financial solutions to women entrepreneurs. It claims to have a headcount of over 17,000 employees and reportedly serves over 4.2 million customers across over 20 states.
“This transformative era for Svatantra, propels us towards our goal of becoming the foremost and most impactful microfinance institution, creating a conducive environment for entrepreneurs who fuel India’s growth story,” said Ananya Birla, chairperson at Svatantra.
Meanwhile, Shweta Jalan, Managing Partner, Advent International, added: “We believe the microfinance sector serves as a cornerstone for financial inclusion for women entrepreneurs in rural areas.”
Advent has been investing in India since 2007. Since its inception, the PE major has committed $6 billion across 18 investments, of which $1.2 billion has been committed in the financial services sector alone.
The transaction is subject to statutory and regulatory approvals from the Reserve Bank of India and the Competition Commission of India.
“Its recent acquisition of Chaitanya brings together two exceptional platforms and management teams,” said Renuka Ramnath, founder, MD and CEO, at Multiples, which is said to have closed its fourth fund at around $800 million recently. Multiples counts Cholamandalam Finance (India’s most valuable CV financier), Vastu (a tech-led, high-quality housing finance business), Veritas Finance (a leading MSME financier), among its portfolio companies.
