Singapore-based private equity firm Affirma Capital has reached an agreement to lead a Rs 350 crore ($47 million) funding in Indian non-bank financial company Belstar Microfinance, according to an announcement.
Affirma Capital will invest Rs 300 crore ($40.4 million) out of the total. Belstar’s parent firm Muthoot Finance, as well as existing investor Danish asset management company Maj Invest, will also participate in the investment.
Vijay Nallan Chakravarthi, managing director at Affirma Capital will be joining Belstar’s board.
Belstar initially sold a 57.16% stake to Muthoot Group for Rs 55.40 Cr in 2016. Later in 2018, Maj Invest, through its Maj Invest Financial Inclusion Fund II, invested in 11% of the NBFC business.
Belstar has expanded its branch network to 650 stores in 19 states, with over Rs 3,100 Cr assets under management, and has upgraded its rating from CARE BBB- to CRISIL AA-.
“This funding will help Belstar to grow its loan book and accomplish its vision of becoming a socially responsible microfinance institution working towards entrepreneurship and economic empowerment of women,” said George Alexander Muthoot, managing director of Muthoot Finance.
For Affirma Capital, Belstar will bolster its India portfolio which includes Northern Arc Capital, Mahindra and Mahindra Financial Services, Prodapt Solutions, Travel Boutique Online, Craftsman Automation, Varun Beverages, and GMR airports, among others.
Northern Arc Capital and Fusion Micro Finance have recently filed with the Securities Exchange Board of India for their initial public offerings.
Meanwhile, several companies in the space have raised funding this year, such as Svasti Microfinance, which bagged ₹310 million in March, and SATYA MicroCapital which last week secured about $18 million through non-convertible debentures. The investment followed SATYA’s earlier $21 million equity funding round from Japan-based impact investor Gojo & Company Inc in February.