IFMR Capital, a non-banking finance corporation connecting capital markets and financial institutions, has received a $50 million commitment from Standard Chartered Private Equity (SCPE).
The first tranche of $17 million has been completed, with the transaction allowing existing investor Leapfrog to partially exit the company while remaining a major shareholder. The proceeds will be used to strengthen the company’s presence in relatively unbanked sectors in India such as affordable housing finance, small businesses, vehicle finance, agriculture finance and microfinance. It will also enable the company to strengthen its product innovation and expand into other sectors.
“SCPE’s equity investment will strengthen our ability to work with a much larger number of originators across asset classes in the coming years and make access to financial services a reality for millions of low-income households and small enterprises in India,” said Kshama Fernandes, managing director and CEO of IFMR.
“We are quite optimistic about the growth prospects of IFMR Capital’s target market, which is focused on financial inclusion in under-penetrated credit segments. IFMR Capital is by far the market leader in the segment and we are excited to partner with a management team which is truly best-in-class,” added Vijay Chakravarthi, executive director of SCPE.
Prior to this deal, IFMR Capital raised $25 million in funding from Eight Road Ventures in November this year, with $94 million raised in total since 2014.
IFMR Capital has launched three domestic alternative investment funds offering mid- to long-term debt funding to originators. Its latest fund was launched in July this year, targeting a total corpus of INR1 billion and has made two investments into the debt instruments of microfinance companies.
IFMR Capital, an affiliate of India’s IFMR Holdings, has enabled over 100 financial institutions to raise debt from the capital markets. It has facilitated debt financing of more than $6 billion to its originators serving over 25 million individuals in 500-plus districts of the country.