WestBridge Cap to Buy Stake in NBFC Vistaar for .` 100 cr
Vistaar’s existing investors will put in .` 40 cr to maintain holding
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.