Equitas to raise Rs 300 cr in its largest fund raise

In FY13, Equitas Holdings had raised Rs 140 cr through IFC and its earlier investors, Micro Ventures and Caspian

Equitas Holdings, the holding company of the Equitas group of companies, is in the process of raising close to Rs 300 crore through the private equity (PE) route, sources said. The Chennai-based company with presence in microfinance, used commercial vehicle finance, housing finance, and loans against property, is at an advanced stage of negotiations with PE investors for its largest-ever fund raising in its six year of operations.

In FY13, Equitas Holdings had raised Rs 140 crore through IFC and its earlier investors, Micro Ventures and Caspian. As and when Equitas finalises the next round of its Rs 300-crore fund raise, it will be the second largest fund raise in the microfinance segment in India during this financial year after Bangalore-based Janalakshmi raised Rs 325 crore through the PE route earlier this month.

While Equitas' management said there is no such move in the offing to raise funds, two independent investment bankers said Equitas is closing in on a fund raise of $50 million.

Equitas assets under management grew to Rs 1,135 crore by March. Its capital-to-risk adjusted assets were at 27.18 per cent against the required 15 per cent. Of the sanctioned limits of Rs 1,345 crore from financial institutions, Rs 1,030 crore was used by the end of FY13.

According to Alok Mittal of Canaan Investors, Equitas is scaling up its business at a good pace. "We are pretty happy how our investment has shaped up," Mittal added.

According to a PwC study, the banking, financial services and insurance sector saw a considerable drop in PE investments - from $264 million across 10 deals in the preceding quarter to $138 million from five deals in this quarter. "It declined 47 per cent in value and 50 per cent in volume.

Even when compared to the same quarter last year, there has been a drop of 60 per cent in the value of investments and 60 per cent in the number of deals," the report added.