Microfinance

Ujjivan raises Rs 640 Crore in Equity / Debt

Bangalore headquartered Ujjivan Financial Services has received Rs 600 Crore in funding from a consortium of foreign investors comprising of Commonwealth Development Corporation and CX Partners who along with India based Newquest ( A unit of the Bajaj Group).

Out of the Rs 600 Crore, about Rs 300 Crore will be spent in buying out the shareholding of existing investors in Ujjivan Financial Services while the remaining Rs 300 Crore will towards fresh issue of shares leading to equity dilution. Early investors like Elevar Equity, Sequoia Capital and Lok Capital will be reducing their shareholding while the IFC which is a major shareholder plans to increase it’s stake.

Ujjivan Financial Services has operations in 24 states across India. It has 2 million clients that it serves through 6500 employees at 423 branches.

ujjivan india
Ujjivan has also raised Rs 40 Crore through issue of NCD’s to Oikocredit. The NCD’s have been listed on the BSE and the transaction was concluded in the second week of January 2015. This is the second investment by Oikocredit in Ujjivan Financial Services. Oikocredit is a co-operative based in the Netherlands which offers loans and invests in microfinance companies, SME’s in developing countries around the world. The Non Convertible Debentures to Oikocredit are secured, redeemable and non convertible.

The Microfinance Sector in India is witnessing a strong revival and this is reflected in the share prices and valuations of Microfinance companies which have started to zoom. While they are much lower than the peak the touched before the Andhra Pradesh Microfinance Crisis , many investors in Microfinance are sitting on substantial profits and gains.

SKS Microfinance Share Price Doubles

SKS Microfinance , India’s largest listed Microfinance company has seen it’s share price double over the last one year. From a low of Rs 175 that it touched in early January 2014, it is currently trading at Rs 440 on the National Stock Exchange at 1:00 PM on 23rd January 2015.

sks microfinance chart

Share Price of SKS Microfinance in the past one year.

 

Many stock analysts believe that SKS Microfinance still has the potential to scale up even more as it’s earnings have seen a steady revival and uptrend.

Bandhan Financial Services , another MFI with large scale operations in the East of India has been granted a banking license , the first Indian Microfinance company given the privilege to convert into a bank by the country’s central bank – The Reserve Bank of India.

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