Procurement News Notice |
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| PNN | 9672 |
| Work Detail | Non-banking finance company Au Financiers (India) Ltd is set to raise up to $50 million from existing investor International Finance Corporation through non-convertible debentures. The Jaipur-based company offers loans to low-income, self-employed, small transport entrepreneurs in semi-urban and rural Rajasthan and other Indian states like Maharashtra, Gujarat, Madhya Pradesh, Punjab, Goa, Chhattisgarh, Delhi, Himachal Pradesh and Haryana. Au Financiers, which is also backed by Warburg Pincus, ChrysCapital, and Kedaara Capital, had received ‘in principle’ approval from the Reserve Bank of India to set up as a Small Finance Bank in September last year. The company has been, therefore, in the process of reducing foreign ownership to comply with the RBI norms. It was recently reported that Kedaara Capital, ChyrsCapital Investment Advisors India, IFC and Warburg Pincus part-exited the company, while Motilal Oswal Private Equity sold its entire stake in a deal worth 751 crore ($110 million) to meet the central bank’s norms. The investors had sold around 15 per cent stake to a clutch of investors taking foreign shareholding in the company down to 49 per cent in compliance with the had sold around 15 per cent stake to a clutch of investors taking foreign shareholding in the company down to 49 per cent in compliance with the Reserve Bank of India norms for small finance banks. Foreign investors held around 62 per cent stake in Au Financiers, which had to realign its business interests in other entities after the RBI directed small finance banks to comply with the regulations within 18 months of commencing business. “The project would demonstrate IFC’s continued support to an NBFC focused towards serving an under-served market and targeting customers at the base of pyramid in the low and middle income states,” the investment arm of World Bank said, in a disclosure. “IFC’s support will help the existing clients to mobilise substantially longer tenor loans than those available to them from traditional wholesale sources. This will strengthen their financial position as they may not be able to raise bank funding during the transformation phase. A strong balance sheet position to begin with will be beneficial for the small banks to garner retail deposits and other funds,” it added. IFC further said that its debt support to Au will help the company attract other FIIs as takers of its corporate debt. In 2012, IFC along with Warburg Pincus had invested $50 million in Au Financiers, wherein the private equity firm had invested about $45 million and the remaining $5 million came from IFC. Au originates vehicle loans, small business loans against collateral mainly in semi-urban and rural areas. It offers MSME loan with a ticket size of Rs 0.2-5.0 million and tenor of 5-10 years, for income generating activities of micro and small manufacturers and service enterprises, and agagriculture based SMEs. Its clientele include truck/ tractor body manufacturer, auto ancillary units, brick making units, carpenters, general provision stores, fabrication units, schools and other educational institutions, etc. |
| Country | India , Southern Asia |
| Industry | Financial Services |
| Entry Date | 15 Oct 2016 |
| Source | http://www.dealstreetasia.com/stories/52902-52902/ |
