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Months after closing in on the most significant acquisition in the microfinance space, highly placed sources say Ananya Birla-promoted Svatantra Microfin is at advanced stages to seal its maiden equity funding deal.
While talks are said to be on with a few large private equity firms, negotiations with Multiples Alternate Asset Management may have reached some finality. “Critical rounds of due-diligence are done with, and deal may be at its final stages of conclusion,” said a highly placed source with knowledge of the transaction.
Targeting about ₹1,500 crore funding, this is likely the largest private equity transaction in the MFI space post Covid pandemic. The private equity investor is expected to get a 20-30 per cent stake in Svatantra along with board seats.
Equity capital flowing into Svatantra through the deal may be deployed for funding Chaitanya India Fin Credit acquisition which was concluded by the former in October this year.
Chaitanya India Fin Credit, backed by Sachin Bansal-promoted Navi Finserv Limited and Navi Technologies Limited, was acquired by Svatantra in an all-cash deal for ₹1,479 crore. Svatantra will retain Chaitanya as its wholly owned subsidiary.
Email sent to Svatantra Microfin seeking confirmation remained unanswered till press time.
Eye on listing
With assets under management of ₹12,874 crore as on June 30, 2023, Svatantra is now the second largest NBFC-MFI, post the acquisition. Considering a worthy improvement in stature and positioning among pure-play MFI players, sources say the lender is aiming for a listing in the equity market in 2025
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“With a private equity investor coming on board, listing is the next target for the company,” said one of the sources quoted above. In fact, the top management team of Chaitanya, including founder Anand Rao, is said to have been retained post the acquisition. “The earlier plan was that Anand and his leadership team would move out, handing over the operations to Svatantra. Now they will work with the parent for its listing,” said a CEO of a NBFC-MFI who didn’t want to be named.
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