MUMBAI: India Business Excellence Fund – III, managed and advised by Motilal Oswal Private Equity, has invested $25 million to pick up a minority stake in Fincare Small Finance Bank through a secondary acquisition.
Fincare Small Finance Bank (SFB) is a Bengaluru-based MFI-NBFC turned Small Finance Bank. Fincare was one of the 10 applicants of a total of 72 to receive the Reserve Bank of India’s (RBI) approval for converting into a small finance bank under the guidelines for this new class of lenders issued by the central bank in 2015. Before converting into a small finance bank, the microfinance lender was largely conducting business from two entities – western India-based Disha Microfin and South India-based Future Financial Services under a single overarching management team.
It commenced banking operations in July 2017.
This transaction provides a partial exit to True North Fund V LLP one of the key investors in Fincare, the statement said. Other investors in Fincare SFB are TA Associates, LeapFrog Investments, Tata Opportunities Fund, among others.
“Over the past decade microfinance has established itself as an asset class with potential for high growth and profitability. Based on our assessment, a Small Finance Bank is the best platform to capitalise on this opportunity. Fincare has established itself as a pioneer in this space with its focused approach towards efficient last mile distribution of financial products and services. The enormous white space available for retail banking in India combined with the strong execution capabilities of the Fincare management team makes this partnership quite exciting for us,” said Vishal Tulsyan, managing director and CEO of MOPE.