Incorporated in 1995, Sonata Finance Pvt Ltd (Sonata Finance) was acquired by its current management in 2006, following which the company started its microfinance operations. The promoters have experience of managing operations of a large MFI based in northern India. In 2007, Sonata Finance acquired the microfinance unit of the Jeevika Livelihood Support Organisation in Madhya Pradesh.
Sonata Finance is one of the fastest growing NBFC-MFIs in northern India and had a network of 162 branches spread across 48 districts in five states, and a loan portfolio aggregating Rs.246 crore as on September 30, 2013.
Performance on key parameters
- The portfolio outstanding and borrower base have grown at a CAGR of 48 and 31 per cent respectively during the 3 years ended March 31, 2013. Though the operations are predominantly concentrated in Uttar Pradesh, the company has a presence in five states and is focused on improving its geographic diversity over the medium term
- Systems and processes are sound; they have helped maintain healthy asset quality—with 30+ dpd of 0.2 per cent as on September 30, 2013
- Has relationships with 17 lenders as on September 30, 2013; also raises funds through securitisation on a regular basis. Recently raised funds through issue of non-convertible debenture to further diversify its resource profile
- Adequately capitalised for current scale of operations, with net worth of Rs.81 crore and gearing of 2.8 times as on September 30, 2013; the company has plans to infuse more capital in near future to support medium-term growth
- Profitability is modest but improving. The return on managed assets improved to 2.8 per cent during the first half of 2013-14 from 1.1 per cent during 2012-13. However, ability to maintain profitability while reducing its margin to comply with revised regulations will be critical
Sonata Finance Financials
The latest financial data which is available in the public domain is given below :