Warburg Pincus to acquire majority stake in MSME lender Vistaar Finance

NBFC has more than Rs 2,600 crore in AUM and it has some 200 branches

Warburg Pincus, the global private equity firm, through its funds will acquire a majority stake in Vistaar Finance, which lends to MSMEs in India, for an undisclosed amount.

An affiliate of Warburg Pincus LLC has entered into a definitive agreement to acquire a majority stake in Vistaar, a non-banking financial company (NBFC). Shareholders exiting through deal include WestBridge Capital, Elevar Equity, Omidyar Network India and Saama Capital.

The transaction is subject to regulatory and certain other approvals, Vistaar Finance said in a statement.

Vistaar, founded by Brahmanand Hegde and Ramakrishna Nishtala, has assets under management (AUM) of more than Rs 2,600 crore and 205 branches in 12 states.

According to a corporate presentation by Vistaar, its portfolio has grown by a compounded annual growth rate (CAGR) of 46 per cent in the last 10 years. Its portfolio was Rs 36 crore in FY12 and rose to R 2,325 crore in FY22. The net worth grew by a CAGR of 41 per cent from Rs 18 crore in Fy12 to Rs 764 crore in Fy22.

Its target segments include textiles, automobiles, power looms, agri-allied activities, kirana stores, hotels and restaurants, agro and food processing and light engineering.

Brahmanand Hegde, executive vice chairman of Vistaar said, the company will leverage Warburg Pincus’s experience of investing in Indian financial services.

Narendra Ostawal, Managing Director, Warburg Pincus said, micro-enterprises in semi-urban and rural India are underserved by formal sources of credit. Vistaar has the potential to fill that need gap and be a driver for broad-based growth in those regions and communities.

Kotak Investment Banking is the exclusive financial advisor in the transaction.