West­Bridge Cap to Buy Stake in NBFC Vis­taar for .` 100 cr

Vis­taar’s ex­ist­ing in­vestors will put in .` 40 cr to main­tain hold­ing

The Economic Times - - Companies -

Pri­vate eq­uity fund West­Bridge Cap­i­tal, which pri­mar­ily buys stake in listed com­pa­nies, will ac­quire a mi­nor­ity stake in the Ban­ga­lore-based non-bank­ing fi­nance com­pany Vis­taar Fi­nance for .` 100 crore, two people with knowl­edge of the de­vel­op­ment said.

“The deal is likely to be signed soon and an an­nounce­ment may come next week,” an in­vest­ment banker with knowl­edge of the de­vel­op­ment said. West­Bridge, which man­ages $800 mil­lion, will join the ex­ist­ing set of PE funds.

Vis­taar Fi­nance raised .` 15 crore in its first round of fund­ing from Saama Cap­i­tal and El­e­var Eq­uity in 2010, and two years later, raised .` 40 crore from Omid­yar Net­work and Lok Cap­i­tal. The ex­ist­ing in­vestors will in­vest .` 40 crore through this round to main­tain their hold­ing in the com­pany.

Vis­taar man­ag­ing di­rec­tor and chief ex­ec­u­tive Brahmanand Hegde con­firmed that it is in talks for a fresh fund-rais­ing ex­er­cise but said the com­pany has still not fi­nalised an in­vestor.

“None of the ex­ist­ing in­vestors will exit through this round,” an­other per­son aware of the de­vel­op­ment said. “The com­pany is rais­ing a to­tal of .` 140 crore.”

The fi­nal hold­ings of the funds post the fresh in­vest­ment could not be de­ter­mined. In­vest­ment bank EY was the fi­nan­cial ad­vi­sor to the deal. The spokesper­son de­clined to com­ment when con­tacted over the phone.

“Ro­bust growth in the Vis­taar Fi­nance port­fo­lio has

SNEHA SHAH & MAD­HAV CHAN­CHANI

re­sulted in an in­crease in the gear­ing lev­els to about 3.0 times in De­cem­ber 2013 from about 1.2 times in March 2013. VFSPL would need ex­ter­nal cap­i­tal of .` 75105 crore (128-180% of net­worth as on De­cem­ber 31, 2013) over the next three years to fund its growth plans,” said a re­port by credit rat­ing agency ICRA on Vis­taar re­leased in March. Vis­taar Fi­nance is fo­cused on lend­ing to mi­cro, small & medium en­ter­prises (MSMEs), which is pri­mar­ily not funded by banks. It pro­vides loans of .` 40,000 to .` 25 lakh across seg­ments like power looms, gro­ceries, light en­gi­neer­ing, fab­ri­ca­tions and food pro­cess­ing. Vis­taar was founded in 2010 by Brahmanand Hegde and Ra­makr­ishna Nish­tala, who had ear­lier worked with Fuller­ton, a mi­cro­fi­nance lender. “We ex­pect to more than dou­ble its loan book from .` 240 crore in FY14 to nearly .` 500 crore in the com­ing fis­cal year,” Hegde had said in an ear­lier in­ter­ac­tion. The non-bank­ing fi­nance com­pany, which started by fund­ing smaller com­pa­nies in Tamil Nadu and Kar­nataka, has now ex­panded to Gu­jarat and Ma­ha­rash­tra. It has as many as 800 em­ploy­ees and serves 30,000 cus­tomers through more than 80 branches.

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