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Asian Development Bank investing $10 mn in Satin Creditcare Network

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Asian Development Bank is investing $10 million (around Rs 65.8 crore) in New Delhi-based Satin Creditcare Network Ltd through a preferential allotment in return for a 4% stake, the firm said in a disclosure. 

The company said it is increasing the authorised share capital of Rs 130 crore to Rs 140 crore through an additional issuances of one crore equity shares. After the issuance, the number of equity shares will increase to 6.5 crore while the number of preference shares will remain the same at 7.5 crore.

Asian Development Bank would buy 15,99,924 equity shares at an issue price of Rs 416.67 while Trishashna Holdings & Investments Pvt. Ltd would buy another 6,58,690 fully convertible warrants at an issue price of Rs 455.45, it said.

Shares of Satin Creditcare rose 0.27% to Rs 390 in a strong Mumbai market on Tuesday.

Satin Creditcare was formed in 1990 as a non-bank financial company (NBFC) to provide individual loans to urban shopkeepers to purchase generators for their businesses. It evolved to become a microfinance firm with a presence in North India.

It had first raised private investment from Lok Capital and columnist Swaminathan S Anklesaria Aiyar way back in 2008 and later brought on board other investors. It was listed on regional exchanges and last year graduated to the national bourses. It currently commands a market cap of Rs 1,465 crore.

Satin Creditcare claims to be the biggest microlender in North India and the fifth-largest in the country with presence across 16 states and 431 branches as of 31 March 2016. Its gross loan portfolio increased 53% to Rs 3,270 crore last year.

It caters to the low income group and offers micro, MSME and  small-ticket loans against property as well as product financing and business correspondent services through Taraashna Services Pvt. Ltd. It had 3,918 employees, 431 branches and 1.85 million active clients as on 31 March 2016.

In September last year, emerging markets focused private equity investor Equator Capital struck its second exit from the company.

Another early investor, which came on board in the pre-Andhra MFI crisis period, also part-exited the company making a neat profit in July. Copenhagen-based Danish Microfinance Partners  partially exited its six-year-old investment in the firm through secondary share transactions.

In 2013, Lok Capital had exited Satin Creditcare. At the time Equator reinvested in the firm along with other investors.

Satin Creditcare also counts Norwegian Microfinance Initiative (NMI) and MicroVest as investors.

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Satin Creditcare Network Ltd. (formerly known as Satin Leasing and Finance Pvt. Ltd.) is a non-banking finance company (NBFC). It provides loans to urban and rural people to meet productive requirements in starting new businesses and also for growing existing businesses. The company also provides an insurance product to its clients to protect their families in the case of sickness or death and to mitigate company risk in these unfortunate circumstances. The firm’s urban micro finance operation is based on the individual and mutual liability model. The company was founded in 1990 and is based in New Delhi, India.

Asian Development Bank is a multilateral development financial institution. It helps in economic and social development in Asian and Pacific countries through loans, equity investments, guarantees and technical assistance. The company also works in partnership with governments, public and private enterprises in its developing member countries for economic and social development. The firm provides its services in the domain of infrastructure development focusing on, energy, information and communications technology, transport, urban development, water and energy. The company was founded in 1966 and is based in Manila, Philippines.

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