Bangalore-headquartered, Ujjivan Financial Services, a leading microfinance institution with pan-India presence, has raised INR 40 Crores of debt capital through issuance of listed, secured, redeemable, non-convertible debentures (NCDs) to DMW (Cyprus) Limited , a member of the Developing World Markets (DWM) group of companies. Unitus Capital is the exclusive financial advisor and sole arranger of the issue.
The NCDs are listed on the Bombay Stock Exchange and have been fully subscribed to by Connecticut-headquartered DWM which is an asset manager and investment bank exclusively dedicated to making socially positive investments in order to promote sustainable economic and social development on a global scale.
The investment by the SEBI-registered FII, the sub-account holder, DMW (Cyprus) Limited into debt paper of an Indian microfinance institution comes at a critical time given the backdrop of the liquidity of the sector drying up in wake of the Andhra Pradesh crisis.
Commenting on the landmark deal, Samit Ghosh, Managing Director, Ujjivan, said,” We expect the banks & financial institutions in India to resume lending to MFIs outside Andhra Pradesh post Reserve Bank of India’s directions of December 22nd, 2010. We are proud to be the recipient of the first international transaction after that date, where DWM has showed the way.”
Complimenting Ujjivan, Jim Kaddaras, Partner for Debt, Structuring and Legal Affairs at DWM, said, “We are delighted to be able to support Ujjivan at a time when Indian MFIs need reliable long-term partners who share both their financial and their social goals. DWM is committed to the microfinance sector in India, and we hope to expand our support to Indian MFIs in 2011.” The transaction confirms the inherent strength of Ujjivan’s operations and highlights the leadership role played by DWM and Unitus Capital in global microfinance.
“Given the current status of the sector, banks are wary of lending to MFIs. As such, it has become even more critical for MFIs to diversify their funding sources. The transaction has helped Ujjivan raise bulk funding at competitive rates and reaffirm the positive investor sentiments towards the Company and the sector in general. Unitus Capital takes pride in having structured and facilitated this transaction with a pioneering MFI and a leading microfinance investor,” stated Gautam Verma, Director, Unitus Capital.