Sa­munnati in talks with PE firms to raise up to $70 mn

Mint ST - - DEALS - De­bor­shi Chaki & Swaraj Singh Dhan­jal MUM­BAI

Fundraise to help the agri-fo­cused lender scale up its loan book and ex­pand net­work

Sa­munnati Fi­nan­cial In­ter­me­di­a­tion and Ser­vices Pvt. Ltd, a non-bank­ing fi­nan­cial com­pany (NBFC) spe­cial­iz­ing in loans to farm­ers and en­ti­ties en­gaged in agri­cul­ture, is in talks with global pri­vate eq­uity firms Gen­eral At­lantic (GA) and War­burg Pin­cus to raise around $50-70 mil­lion, two peo­ple aware of the de­vel­op­ment said.

Mint re­ported on 13 De­cem­ber that Sa­munnati had started talks with PE firms for a new round of cap­i­tal in­fu­sion.

“Gen­eral At­lantic and War­burg are talk­ing with Sa­munnati. They plan to di­lute a sig­nif­i­cant mi­nor­ity stake through the lat­est fundraise that will help them raise around $50-70 mil­lion. The fundraise will help the agri-fo­cused lender scale up its loan book and ex­pand its branch net­work,” said the first per­son cited above, re­quest­ing anonymity as the talks are pri­vate.

In­vest­ment bank Ko­tak Mahin­dra Cap­i­tal is ad­vis­ing Sa­munnati on the fundraise, said the sec­ond per­son cited above, also re­quest­ing anonymity.

The com­pany was founded in 2014 by Anil Ku­mar S.G., a banker with more than 27 years of ex­pe­ri­ence with banks such as ICICI Bank and Ca­nara Bank.

Sa­munnati claims on its web­site that it has dis­bursed over ₹1,000 crore in loans till date and has an out­stand­ing loan port­fo­lio of ₹380 crore. The lender op­er­ates across 12 states, ca­ter­ing to 34 agri­cul­tural value chains.

Sa­munnati fo­cuses on five broad seg­ments of agri­cul­ture—fresh fruits, veg­eta­bles and flow­ers; dairy, poul­try and fish­ery; post-har­vest food pro­cess­ing in­dus­try; agri in­puts such as seeds, fer­til­iz­ers, agro chem­i­cals, ma­chin­ery and farm equip­ment, small and mi­cro ir­ri­gation; and field crops and hor­ti­cul­ture com­modi­ties.

Sa­munnati’s lat­est fundrais­ing ef­forts fol­low a ₹150 crore eq­uity in­fu­sion in Jan­uary 2018 in a round led by Re­spon­sa­bil­ity In­vest­ments AG, with par­tic­i­pa­tion from ex­ist­ing in­vestors Ac­cel Part­ners and El­e­var Eq­uity. Re­spon­sa­bil­ity is a Zurich-based so­cial im­pact in­vest­ment firm with more than $3 bil­lion in as­sets un­der man­age­ment.

Emails sent to Sa­munnati’s founder Anil Ku­mar, GA and Ko­tak Mahin­dra Cap­i­tal did not elicit any re­sponse. War­burg Pin­cus de­clined to com­ment.

For the fi­nan­cial year 2017-18, Sa­munnati re­ported a con­sol­i­dated rev­enue of ₹140.27 crore, as com­pared to a rev­enue of ₹24.43 crore in the pre­vi­ous fis­cal, ac­cord­ing to the com­pany’s fil­ings with the regis­trar of com­pa­nies. It nar­rowed its con­sol­i­dated net loss to ₹3.3 crore in 2017-18, from a loss of ₹7.7 crore a year ear­lier.

Rat­ing agency Icra said in a re­port in Septem­ber that Sa­munnati has wit­nessed strong growth on the back of its last fundraise, but will need reg­u­lar fund­ing to main­tain its growth rate.

“Aided by the cap­i­tal in­fu­sion (₹150 crore), the com­pany’s man­aged port­fo­lio, on a con­sol­i­dated ba­sis, grew more than three-fold (year-on-year) to about ₹342 crore as of June 2018, while main­tain­ing a com­fort­able cap­i­tal­iza­tion pro­file (man­aged gear­ing of 1.1x). Icra notes that al­though the cur­rent cap­i­tal­iza­tion will be ad­e­quate to meet its near-term growth, the com­pany may re­quire reg­u­lar cap­i­tal to grow its book at a CAGR (com­pounded an­nual growth rate) of 90-100% over the next three years as in­ter­nal gen­er­a­tion is ex­pected to re­main rel­a­tively mod­er­ate,” the re­port said.

de­bor­shi [email protected]


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