Annapurna Finance to raise $25m from ADB, OIJIF

A money lender counts Indian rupee currency notes at his shop in Ahmedabad Photo: Reuters

The Asian Development Bank (ADB) and private equity firm Oman India Joint Investment Fund (OIJIF) are investing ₹180 crore (around $25 million) in east India-based microfinance firm Annapurna Finance, said two people aware of the development.

Bhubaneswar-based Annapurna is promoted by social activist Gobinda Pattanaik. With a portfolio of more than ₹2,253.4 crore ($316.32 million), it is one of the leaders in microfinance in eastern India. It serves more than 1.4 million borrowers through a network of more than 500 branches, with more than 4,000 employees.

“They are in advanced stages of closing the paperwork for their latest round of funding. The formalities are expected to be completed in the next few days.

ADB has invested around ₹130 crore ($18.25 million) in the company in this round, while the rest has come from OIJIF, which has made a secondary investment by purchasing shares from some existing shareholders of the firm,” said one of the people cited above, requesting anonymity as the discussions are private.

Bringing ADB as an investor will allow Annapurna access long-term credit line from ADB, the person said.

Emails sent to ADB and OIJIF did not elicit any response. Annapurna declined to comment on the development.

The latest round of funding follows Annapurna’s ₹155 crore ($21.76 million) fundraise in June last year from OIJIF, a private equity fund backed by Oman’s sovereign wealth fund, State General Reserve Fund, and India’s largest lender, State Bank of India.

Annapurna, which is focused on rural India, is primarily engaged in providing micro loans to women for income-generating activities.

The company has raised multiple rounds of equity in the past.

Its earlier investors include Small Industries Development Bank of India (Sidbi), Incofin, Belgian Investment Organization, Sidbi Venture Capital, DCB Bank, Oikocredit, Women’s World Banking and Bamboo Capital Partners.

The microlender reported a 39% growth in revenue in financial year 2018 to ₹342 crore ($48 million).

OIJIF, which has topped up its investment in Annapurna, last year announced the second close of its second fund, OIJIF II, with commitments of $230 million ($32.29 million).

Other investments from its second fund include ₹100 crore ($14 million) in Pune-based automobile components maker Divgi TorqTransfer Systems and a ₹170 crore ($23.86 million) investment in Stanley Lifestyle, a luxury furniture and home decor products maker.

Several nonbank lenders have raised funds from private investors in recent months, despite fears of a liquidity crunch in non-banking financial companies (NBFCs).

NBFCs that have raised private equity funding in recent months include SME lender Veritas Finance Pvt. Ltd and commercial vehicle financiers Ess Kay Fincorp Ltd and Kogta Financial India Ltd.

On 14 January, Mint reported that Samunnati Financial Intermediation and Services Pvt. Ltd, an NBFC specializing in loans to farmers and entities engaged in agriculture, is in talks with global private equity firms General Atlantic and Warburg Pincus to raise around $50-70 million.

Earlier this month, the Press Trust Of India (PTI) reported that ADB plans to scale up its funding commitments in India to $4.5 billion (about ₹31,500 crore) in 2019, with about $1 billion earmarked for the private sector.

Also read:

Indian microfinance lender Annapurna raises $23.2m from Oman fund

India: Annapurna Microfinance raises $9.5m led by Bamboo Capital

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.