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Xander Finance commits $12.2m to Indian school chain

The real estate-focused NBFC has entered the Indian education sector with debt backing for a Bangalore-based school chain.

Xander Finance, the non-banking financial company (NBFC) of alternative investment firm The Xander Group, has lent Rs81 crore ($12.2 million) to Bangalore-based school chain operator, Jain Group of Institutions (JGI).

Amar Merani, the chief executive officer of Xander Finance, told PDI that the Rs81 crore investment has been packaged as a senior secured loan facility with a seven-year term. It will go to the school chain’s parent company and a trust. The investment targets a return in the mid-teens.

A major portion of the loan has been used to replace debt from Karvi Finance and the remaining Rs16 crore will be used to finish the construction of two school assets, Chenraj Roychand, founder and chairman of JGI Group, told local press.

“JGI Group fits well into our strategy as it is one of the leading players in Karnataka and has clear visibility and predictability on revenue,” Merani said. “This is our first investment in the education space and we are looking at sealing more transactions in the sector.”

JGI Group is an education provider and an entrepreneurship incubator in India. The group operates 85 educational institutions with 51,600 students and 6,450 employees engaged at the K-12, undergraduate and postgraduate levels spread across 64 campuses in the country.

Xander Finance is an NBFC licensed by the Reserve Bank of India. According to local press, most of its investments are in the real estate sector, including previous investments in Bangalore-based Mahaveer Group and north India-based developers Supertech and Prateek Group.