Equitas microfinance has reported that CLSA Capital Partners has invested Rs 108 Crore($24 million) to acquire an minority stake in the company.CLSA Capital Partners is a specialist private equity investment management firm, and invests in Asia through it’s Aria Investment Partners series of pan-Asian private equity funds. Aria partners with owners and managers of outstanding middle market companies to provide capital for expansion, acquisition and recapitalisation both before and after a public listing.
This is the latest investment from foreign funds in Indian Micro finance companies.Early in March this year Equitas Microfinance had signed a loan securitisation structure with IFMR Capital for lending and repayment of funds with principal amount of Rs15.7 crore.
Equitas Microfinance was founded in 2007 by Mr. P N Vasudevan who had previously been the vice president in Cholamandalam Investment & Finance Co Ltd, where he handled the retail business division comprising of vehicle loans. Equitas today has a loan portfolio of nearly Rs 600 crore ($130 million) and serves over ten lakh customers collectively in the states of Tamil Nadu, Andhra Pradesh and Maharashtra. Equitas was quick to scale up by investing in technology and has achieved this scale in a short span of three years.
Many other Indian microfinance companies are also planning to raise capital and some intend to go public with SKS Microfinance having taken the lead and has filed its draft red herring prospectus with SEBI.
Despite the unprecedented growth that the microfinance sector has been witnessing during the last five years many analysts believe there is still a room for further growth as there is a huge unmet demand for credit in the rural areas.