Janalakshmi Financial Services announced last week that it had raised Rs 325 Crores in Series D Primary Equity from a group of institutional investors. This is the largest transaction in the history of the Indian Microfinance Sector since the Andhra Pradesh Microfinance Crisis in 2010. Before this capital infusion, Janalakshmi Financial Services had raised around Rs 600 Crore in multiple rounds over the last six years.
The current round of equity investments was lead by Morgan Stanley Private Equity Asia (MSPEA) along with Tata Capital Growth Fund and QRG Enterprises. Other existing investors such as Havells India , Citi Venture Capital, India Financial Inclusion Fund also participated. Vallabh Bhansali, an HNI investor who is also the co-founder and chairman of Enam Financial Consultants, also participated in this round. Edelweiss Financial Services Ltd and Unitus Capital jointly advised the company on this transaction. Interestingly , the entire promoter stake of Janalakshmi is held by the not-for-profit Jana Urban Foundation.
Speaking on this transaction, V. S. Radhakrishnan, MD & CEO, Janalakshmi, remarked “We are delighted to have raised these funds from both new large investors and existing investors. This is a validation of our business model that we have pursued over the last several years. The core pillars of our business model is our customer and her needs; the persistent use of cutting edge technology and most importantly, strong and motivated human talent from the field team all the way to senior management. This investment will help us continue in our path of growth and innovation, as we continue to focus on building stronger customer relationships with a full suite of financial products and new technology – like Aadhar based front end terminals”
Strongest Management in the Microfinance Sector.
Janalakshmi Financial Services has one of the strongest management teams in the microfinance industry where the top management has collectively more than 300 years of cumulative banking experience. The top management of Janalakshmi including R Srinivasan (Executive Vice Chairman), a former civil servant with 45+ years of experience with ANZ Grindlays Bank, Fitch Ratings, the Indian Revenue Service and JP Morgan, and V.S. Radhakrishnan (MD & CEO), a veteran banker with 25+ years experience with HSBC and ING Vysya Bank and who is also an IIM-A alumnus.
The record breaking investment comes on the back of a three fold surge in net profit at Rs 50 Crores, that Janalakshmi reported for FY14. Since it began operations in 2008, the company has grown to 120+ branches with outstanding loans in excess of Rs.1,400 crore as of FY2014. Going forward the company hopes to raise up to Rs 2000 Crore through multiple instruments over the next 3 years to achieve it’s targeted goal of building a book size of Rs 10,000 Crore.