Dvara KGFS raises ₹70 cr in Series E funding

Dvara KGFS today announced that it has raised ₹70 crore in the final round of Series E funding taking the total tally of funds raised under this round to ₹167 crore. 

The latest round of funding came from Nordic Microfinance Initiative (NMI), an investment fund owned by the Norwegian and Danish governmental funds for developing countries. 

"We are delighted to partner with NMI and Dvara KGFS look forward to tapping into their significant experience in financial inclusion both in India and overseas," said Samir Shah, Vice-Chair & Group President, Dvara Trust.

Prior to this, Dvara KGFS raised ₹97 crore in Series E equity funding in May which was led by Stakeboat Capital, along with existing investors LeapFrog Investment and Dvara Trust. 

“We have set a three-pronged growth strategy namely geographical expansion, product diversification and focus on technology,” Shah said, adding that the company has doubled its presence to 6 states, introduced micro enterprise loan in Tier II and III cities and invested on developing technology. 

In April, Dvara KGFS also acquired Chennai-based micro finance institution Varam Capital for an undisclosed sum. Currently it operates from 276 branches spread across 46 districts with more than 1 million customers. It has started its operations in Jharkhand recently

“We have chosen to invest in Dvara because of their focus on rural customers particularly the wealth management approach perfectly aligns with what NMI wanted to do with its funds,” said  Smriti Chandra, Investment Manager, Nordic Investment Initiative.

NMI which invests in microfinance institutions (MFIs) currently has managed funds of $200 million held under 26 different investments. It currently focuses on South Asia, South-east Asia and Africa. The ₹70 crore investment in Dvara KGFS is NMI’s first investment in India from its newly created ‘financial inclusion’ fund.

NMI has also invested in Utkarsh Small Finance Bank, North East Small Finance Bank, Satin Creditcare Network, Sub-K and Svasti Microfinance. 

The latest round of equity funding to Dvara KGFS comes in the backdrop of a rating upgrade to BBB  from BBB- by rating agency ICRA earlier this month.

“The rating upgrade is an affirmation of the Dvara KGFS management team’s ability to execute growth plans while maintaining strong financial position,” Shah said.

Earlier this year, the company announced that it is planning to raise ₹600 crore of debt funding through bank credit, external commercial borrowings (ECBs) and non-convertible debentures (NCDs). 

“We have raised ₹168 crore through bank line as of August. We are planning to raise ₹200 crore through NCDs in the next quarter,” said Vijayakumar G, Chief Financial Officer, Dvara KGFS.

Dvara KGFS’ assets under management (AUM) currently stands at ₹800 crore, which the company expects to grow upto ₹1,200 crore by the end of the current fiscal. 

“RBI’s recent guideline allowing NBFCs like us to quality for the priority sector lending is a major development to us which will help us to grow further,” Joby C O, Chief Executive Officer, Dvara KGFS.