India: Bandhan Financial Services Raises Rs 100 Crore

Mar 2014
India, March, 25 2014 - Microfinance company Bandhan Financial Services has raised Rs 100 crore from a Geneva-based investor to improve its capital position before the fiscal draws to a close.

Bandhan, which is one of the companies seeking banking license, has raised the fund in non convertible debenture last week, chairman and managing director Chandra Shekhar Ghosh told ET.

Global investors bet on the rising prosperity in rural India. The fact that the new central bank regime could open up banking license has improved prospects of a better regulatory environment for growth.

International Finance Corporation or IFC, a 10.9% shareholder in Bandhan, is also looking to invest another Rs 160 crore of debt in the micro lender. IFC is set to subscribe to the company's subordinated debt, the global lender said in its website.

"The fund will be used next fiscal to prop up growth," Ghosh said. The country's largest micro lender by outstanding loans aims to grow lending 25% next fiscal.

Ghosh said Bandhan issued debentures for three years with an option to extend the tenure for another three years. The coupon was fixed at 13.75%, payable semi-annually.

Bandhan's networth is Rs 1,100 crore with pure equity at Rs 96 crore. Its capital adequacy ratio is at 21% now.

The Kolkata-based MFI, which provides small loans to women in West Bengal and in 17 other states, aims to take its outstanding loans to Rs 6,000 crore by March from Rs 4,421 crore at the end of last fiscal, a projected growth of 35%. At the end of February, its loan outstanding was Rs 5,700 crore.

Aggregate gross loan portfolio of 43 micro finance institutions registered with Reserve Bank of India grew 29% to Rs 23,998 crore with over 85% lenders showing a growth rise in the third quarter over the same period last fiscal, Microfinance Institutions Network said in its latest newsletter released Tuesday.

Andhra Pradesh, West Bengal, Tamil Nadu, Karnataka and Maharashtra are the top five states accounting for 62% of the portfolio.


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