Piramal Alternatives, a unit of the Ajay Piramal-controlled Piramal Group, on Monday said it has invested $75 million in micro-finance lender Annapurna Finance.
Odisha-based Annapurna operates in 450 districts across 20 states, with assets under management of over $1.25 billion as of March 31, 2024. Annapurna Finance has also diversified its portfolio in MSME finance and the affordable housing segment.
The deal involved a combination of secondary purchase of shares and providing tier–2 capital. The structured capital solution will help fuel the risk-calibrated growth of the company’s assets under management, the firm said in a statement.
“Microfinance as a retail asset class has grown at a CAGR of 32% over the last decade and is expected to continue the high growth trajectory,” Kalpesh Kikani, CEO, Piramal Alternatives, said.
“The growth capital from Piramal Alternatives will provide the necessary ammunition for business diversification and help consolidate our leadership position in key markets. Credit penetration in microfinance continues to be low, and with the right capital and partner, we can script a profitable growth story,” said Gobinda Chandra Pattanaik, Managing Director and CEO, Annapurna Finance.
The company’s existing investors include Asian Development Bank, SIDBI, Oman India Joint Investment Fund, Belgian Investment Organization, SIDBI Venture Capital, DCB Bank, Oiko Credit, Women’s World Banking, and Bamboo Capital Partners.
Other recent deals in the segment include Northern Arc’s $80-million funding from the International Finance Corporation (IFC), a member of the World Bank Group; Dutch development bank FMO’s $30-million investment in Indian financial services firm Aye Finance; and an investment of Rs 1,930 crore ($230 million) by Advent International and Multiples in Svatantra Microfin.