City-based non-banking financial company (NBFC) Arman Financial Services Ltd, has raised an aggregate amount of Rs 50 crore from a fund managed by SAIF Partners.

The funds were invested by way of subscription to 16,66,667 Compulsorily Convertible Debentures (CCDs) of the Company, having face value of Rs 300 per CCD. The CCDs and the accrued unpaid interest will convert into 18,90,417 shares, having a conversion price of Rs 300 per share, within 18 months for an aggregate investment up to Rs 56.71 crores, net of taxes on a fully diluted basis, the company informed in a statement here.

Arman Financial operates in three business segments, two-wheeler finance, individual micro-enterprise (MSME) loans, and group-based microfinance loans catering to a niche target audience, including the rural unbanked ecosystem of the country.

"The fresh round of funds will be deployed to increase the loan book of the company, especially in its microfinance and the new MSME division. The fresh raise will be deployed to increase the loan book of the company, especially in its microfinance and the new MSME division, to maintain sufficient capital to meet RBI’s Capital Adequacy norms, and to fund their regional expansion and product diversification," it said.

Currently, the company’s consolidated loan book stands at approximately Rs 425 crore, with a presence in 5 states having a network of 122 branches and employee strength of over 1000.

"The expanded capital base will allow Arman to continue growing its loan book, expand geographically, and diversify its product," said Jayendra Patel, Vice-Chairman & Managing Director, Arman Financial Services Ltd.

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