Ujjivan Financial Services, last week announced that it has raised Rs. 173 million through a securitisation transaction. This is the third capital market transaction for Ujjivan and the first securitization transaction.
Samit Ghosh, Managing Director, Ujjivan said “This is yet another reaffirmation of our sound portfolio quality and the strength of our business operations”. In the past Ujjivan has raised debt capital through issuance of listed, secured, redeemable, non-convertible debentures and has now tapped the capital market again through rated securitization thereby diversifying its source of funding and establishing itself as one of the leading MFIs in the country.
The transaction was structured and arranged by IFMR Capital, a company based in Chennai that has worked to enable funding of more than Rs. 8 billion to high quality microfinance institutions.
Ms. Kshama Fernandes, the CRO of IFMR Capital said “We are pleased to start a relationship with Ujjivan, a high quality originator. The deal affirms IFMR Capital’s commitment to the microfinance sector. Creating marketability of these assets to a broader universe of investors has expanded access to capital for micro-finance institutions”.
The transaction is backed by 21,170 microloans originated by Ujjivan Financial Services. OMEGA PIONEER IFMR CAPITAL 2011, the Special Purpose Vehicle created for the transaction, has issued two tranches of securities rated by ICRA, India’s foremost rating agency: a 91% senior tranche rated LBBB+(so) that was subscribed to by a bank and a 9% subordinated junior tranche rated LBB(so) that was invested into by IFMR Capital.
Sudha Suresh, CFO, Ujjivan said, “This transaction signifies yet another diversification in Ujjivan’s sourcing avenues and marks our first business relationship with IFMR.”