IFMR Capital, a leader in providing access to capital markets to financial institutions serving excluded individuals and businesses, is raising $50 million from Standard Chartered Private Equity (SCPE), with the first tranche of $17 million already completed. This is close on the heels of IFMR Capital’s second institutional funding of $25 million raised from Eight Road Ventures in November, 2016. This investment will take the total funds raised by IFMR Capital to $104 million since 2014. The fresh round of investment will help the company further strengthen its business in unbanked sectors including affordable housing finance, small business, vehicle finance, agriculture finance, microfinance etc. It will also enable the company to bolster its product innovation, and address the capital needs of a growing breed of new-age financial institutions in other sectors. As part of the transaction, existing investor Leapfrog has partially sold its stake in the company. Leapfrog invested $29 million in IFMR Capital in 2014 and will remain a key investor.
Since inception in 2008, IFMR Capital has enabled over 100 financial institutions (originators)to raise debt from the capital market. 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. IFMR Capital has also launched three domestic alternative investment funds offering mid to long-term debt funding to these originators.
IFMR Capital is a pioneer in devising structured products for NBFC-MFIs, HFCs and NBFCs in India. The innovative financial structures designed by IFMR Capital have been a fulcrum in building institutional investors’ confidence and fueling their appetite to invest in financial institutions catering to low income households and small enterprises. Over 100 large investors (banks, asset managers, insurance companies, DFIs, private wealth etc.) have continued to invest in transactions structured and arranged by IFMR Capital.
Kshama Fernandes, Managing Director and CEO, IFMR Capital said “This is a significant milestone for IFMR Capital, as we aim to create a robust debt platform in India for connecting high-quality financial institutions operating in under-banked markets with capital market investors. 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.”
“IFMR Capital’s innovative approach to developing and providing complete capital markets solutions helps high quality originators build successful businesses that provide efficient and reliable access to finance for excluded households. The closure of this equity round with Eight Roads and SCPE empowers IFMR Capital to build new frontiers in capital markets for financial inclusion including building out new investor markets as well as driving liquidity and most efficient price discovery in these markets.” said, Sucharita Mukherjee, CEO, IFMR Holdings and Vice Chair, IFMR Trust.
Vijay Chakravarthi, Executive Director, SCPE, who leads the Financial Services vertical for the firm, said “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”.
“IFMR Capital is an incredible business that is uniquely extending the footprint of financial inclusion in India. It is impacting both lives and country economics,” said Michael Fernandes, Partner and co-leader of LeapFrog’s Asian investments. “The level of innovation and delivery of pioneering products is testament to the incredible management team in place. We look forward to continuing the journey with IFMR Capital as they extend their reach to millions of underserved people.”