CLSA Capital Partners invests $24 mn in Chennai microfinance co

CLSA Capital Partners has bought a minority stake in Chennai-based Equitas Micro Finance India for $24 million.

The investment in Equitas Micro Finance has been done through ARIA Investment Partners III LP, the alternative asset management arm of CLSA Asia Pacific Markets said in a release.

“The investment by the $333 million (Rs 1531.8 crore) Aria III fund closed on March 27 and is in the form of newly issued equity shares,” the release said. This is the third investment by ARIA Investment Partners III and the ninth investment in India by the ARIA group.

Equitas provides microfinance to low income households in India. Founded in 2007, Equitas has a loan portfolio of nearly $130 million (Rs 598 crore) and serves over 900,000 customers from around 150 branches in Tamil Nadu, Andhra Pradesh and Maharashtra. Microfinance is attracting significant investment from venture capital and private equity firms with many global investors putting money into companies in this segment.

In fact, some of the microfinance companies are also planning to go public with Hyderabad-based SKS Microfinance taking the lead having filed its initial public offer.

“Despite the unprecedented growth in this sector during the last five years, there remains considerable, unmet demand in the market. This supports the consensus view that there is potential for continued, significant growth in the sector,” Christopher Seaver, chief executive officer, CLSA Capital Partners, said.