India: SBI FMO picks 10% stake in micro-finance firm Satin Creditcare

SBI FMO Emerging Asia Financial Services Fund has picked up 10 per cent stake in micro-finance institution Satin Creditcare Network Ltd (SCNL), the latter said in a stock market filing.

SBI Holdings, Inc Japan (earlier know as SoftBank Investments and was spun out of SoftBank) is a financial services group focussed on Internet Finance, and is one of the largest private equity and venture capital groups in Japan with assets under management of over $4.5 Billion.

SBI Holdings, through its Singapore HQ, manages the SBI-FMO Emerging Asia Financial Services Fund. This fund is in partnership with the Netherlands Development Finance Company (FMO), the world’s largest development bank, and focuses on growth PE investments in the financial services and fintech areas across emerging Asian economies.

In June 2015, SCNL had raised Rs 51 crore from SBI FMO Emerging Asia Financial Sector Fund and promoters of the company by issuing equity shares and share warrants. It had issued 32,30,000 equity shares at Rs 130 per share and 28,70,000 share warrants at Rs 130 each.

Last month, the fund exercised its option to convert all warrants and picked 10 percent stake in SCNL.

“With Satin shares having traded between Rs 300-400 per share since listing in Oct 2015, they had a 2.5x return in less than 12 months of investment,” SBI Ven Capital’s spokesperson said.

Founded in 1980, SCNL (formerly known as Satin Leasing and Finance Pvt Ltd) provides loans to urban and rural people to meet productive requirements in starting new businesses and also for growing existing businesses.

The company’s microfinance operation is based on both joint liability group(JLG) model as well self help group model (SHG). At present, it offers its services in Bihar, Chandigarh, Delhi, Haryana, Jammu, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh, Uttrakhand, Himachal Pradesh, Gujarat and West Bengal.

New-Delhi-based microfinance institution SCNL is the fourth largest MFI in the country after Janalakshmi Financial Services, SKS Microfinance and Ujjivan Financial Services. The company had a loan book of Rs 2,500 crores as of Dec 2015.

Shares of SCNL closed at Rs 306 each, up 0.96 percent on BSE in a flat Mumbai market on Friday.

Another Micro finance institution Equitas Holdings hit the market on April 5, 2016 to raise Rs 2,200 crore through an initial public offering (IPO).

According to a Micro Finance Institutions Network report, total number of loans disbursed by MFIs grew by 48 percent in Q3 FY 15-16 compared with Q3 FY 14-15, and it provided microcredit to 2.88 crore clients, increased 33 percent over Q3 FY 14-15.

Also Read:

Exclusive: China’s CPFA Microfinance may land $25m equity from existing investor IFC

India: DCB Bank acquires 5.8% stake in Annapurna Microfinance for $1.5m

India: IDFC Bank picks nearly 10% stake in microfinance company ASAI India