Janalakshmi Small Finance Bank, which scripted a turnaround to improve its asset quality, has raised a ₹225-crore round led by existing investor TPG Capital, said two people aware of the development, requesting anonymity.
“Jana’s existing investors have reposed their faith on the lender with this round of growth capital. TPG, which has backed the lender since the last five years, has put in ₹150 crore. Another existing investor, HarbourVest, brought in the remaining capital,” said the first person.
Following the Centre’s demonetization move of November 2016, the small finance bank had been struggling with rising non-performing assets (NPAs), but has now finally managed to turn around its business.
“The bank ended the September quarter in profit, the first quarterly profit since demonetization. The lender’s net NPA stood at just 1.72% as of last month, and has been coming down month over month. Its capital adequacy ratio stands at over 19%, as against the statutory requirement of 15% for SFBs,” said the second person.
TPG declined to comment on the development. Text messages to Janalakshmi SFB chief executive Ajay Kanwal did not elicit any response.
TPG first invested in Jana SFB in 2014, when it was still a micro lender and was called Janalakshmi Financial Services.
Back then, the PE firm led a $75-million round. The micro-financier received an in-principle approval from the Reserve Bank of India to become a small finance bank in September 2015. Subsequently, in April 2016, TPG led a $210-million funding round into Janalakshmi, which started operations as a small finance bank in March 2018.
In September 2017, TPG aided the bank with its turnaround efforts, leading a ₹1,030-crore capital infusion. In January 2018, Boston-based HarbourVest was part of a ₹700-crore investment round in Janalakshmi SFB.
The lender has a diversified portfolio with a presence in 18 states.
It offers group loans, besides small business loans (nano and super-nano), enterprise loans and housing loans among others.
According to rating agency Icra, the bank had a gross loan portfolio of ₹6,520 crore as on 31 March 2019.
This article was first published on livemint.com.