In the largest-ever funding in the Indian microfinance segment, Bengaluru-based Ujjivan Financial Services has raised ₹600 crore through a combination of share sale and partial exits by certain shareholders.

Foreign investors, including UK’s CDC Group, private equity firm CX Partners, NewQuest Asia Investments II and India’s Bajaj Holdings took part in the fund-raising. Existing investors International Finance Corporation and Elevar Equity Mauritius also participated, the company said in a statement.

“This equity transaction is the largest in the sector and reaffirms Ujjivan’s inherent strength in terms of its excellent growth and profitability with strong governance,” said Samit Ghosh, Managing Director and Chief Executive Officer, Ujjivan.

Avendus Capital was the financial advisor to the company and the shareholders who sold stake.

Loan book expansion

Ujjivan intends to use the proceeds to expand its loan book across products (joint liability group lending and individual lending to the economically active poor) and geographies, it added. Founded in 2005, Ujjivan — which operates on both joint liability group lending and individual lending models — has gross managed assets of more than ₹3,100 crore. The microfinance institution has a network of 423 branches across the country in 21 States and three Union Territories.

“The level of interest witnessed in this transaction from financial sponsors and development financial institutions is a testament firstly to the prospects and potential of the sector and secondly to the robust performance of Ujjivan, its management and its future growth prospects,” said Ritesh Chandra, Executive Director and Head — Consumer, Avendus Capital.

In November last year, Bengalaru-based microfinance institution Janalakshmi Financial Services raised an undisclosed amount led by global PE major TPG Asia and existing investors.

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