PE-backed Janalakshmi Fin plans to raise Rs 1.5K-2K cr

The banking aspirant plans to grow its loan book to Rs 10,000 crore in three years

Janalakshmi Financial Services Pvt Limited (Janalakshmi), an urban microfinance institution (MFI), and one of the two MFIs in India to have applied for a banking licence, said it would increase its book to Rs 10,000 crore in the next three years. The company said it would require Rs 1,500-2,000 crore equity to achieve its target of Rs 10,000-crore mark. On Wednesday, the International Finance Corporation (IFC) said it would invest Rs 120 crore in the company in the form of senior debt investment.

V S Radhakrishnan, managing director and CEO of Janalakshmi Financial Services, said: “The company has been growing at around 100 per cent year-on-year and, in the next two-three years, we could touch the Rs 10,000-crore mark. The market is huge and large and the opportunity for customers to access finance is also huge.”

The company might go for one round of fund-raising this year. “Giving our track record, attracting investors shouldn’t be an issue,” Radhakrishnan added. He noted that MFIs had stored some 130 million records in the Credit Bureau in the past 20-22 months.

Janalakshmi, promoted by Ramesh Ramanathan, a former managing director and European head of corporate derivatives at Citibank, is backed by Citigroup Venture Capital, Morgan Stanley Private Equity, Tata Capital, Treeline, India Financial Inclusion Fund, GAWA Capital and QRG Enterprise. The company is a leading urban MFI, headquartered in Bangalore with a borrower base of a million women and a loan portfolio of Rs 2,000 crore. Going forward, Janalakshmi will look at rural opportunity and the “experiment” has already started in Karnataka.

In August 2013, Janalakshmi had raised Rs 325 crore in Series D funding round, led by Morgan Stanley Private Equity Asia. Tata Capital Growth Fund and QRG Enterprises, the holding company of Havells India, also participated. So did existing investors Citi Venture Capital, India Financial Inclusion Fund and Vallabh Bhansali, co-founder and chairman of Enam Financial Consultants.

On how the Rs 120 crore IFC will infuse in the company will be utilised, Radhakrishnan said it would be used for regular business purposes. “The company wants multiple source of funding, including banks. IFC is a good long-term partner,” he said.

IFC said its debt investment will help the company diversify sources of funding by providing comfort to potential lenders and investors. IFC’s debt would also be for a longer tenor, which would enable Janalakshmi to manage its asset liability gaps more efficiently, said IFC.

Janalakshmi is among the largest MFIs in the country with 145 branches and operating in Karnataka, Tamil Nadu, Maharashtra, Rajasthan, Madhya Pradesh, Uttar Pradesh, Uttarakhand, Delhi, Haryana, Gujarat, Puducherry, Bihar, Chhattisgarh, Jharkhand, Punjab and West Bengal.