Oman India Joint Investment Fund II buys 9.9% in Capital SFB for Rs 84 cr

The current round of fundraising will help the bank deepen its penetration in Punjab and expand into Haryana, Rajasthan and NCT of Delhi, with a significant focus on MSME loans

Oman India Joint Investment Fund II (OIJIF), a mid-market private equity firm co-sponsored by State Bank of India (SBI) and State General Reserve Fund of Oman (SGRF), on Monday said it had invested Rs 84 crore for a 9.90 per cent stake in Punjab-based in Capital Small Finance Bank. 

Existing Investors Amicus Capital Private Equity, Amicus Capital Partners India Fund and Pi Ventures also participated in this round. The bank also counts HDFC Life, ICICI Prudential Life and Small Industries Development Bank of India (Sidbi) among its investors. Edelweiss was the financial advisor to the bank for the transaction.

Founded by Sarvjit Singh Samra in the year 2000 as a local area bank, Capital Small Finance Bank has emerged as a leading bank in Punjab. It was one of the two non-micro finance institutions out of the 10 entities (72 applicants) that received the Reserve Bank’s ‘in-principle’ approval to set up a small finance bank (SFB). Capital SFB started operations as India’s first small finance bank on April 24, 2016.

OIJIF CEO Srinath S said: “Capital SFB has all the right ingredients required to be successful in the Indian banking space. We were particularly delighted to see such consistent track record of sustainable growth and profitability over two decades. We are excited to be part of Capital SFB as it now embarks on the journey of growth and expansion.”

Capital SFB MD Samra said: “We have grown consistently since inception and hold a market leadership position in Punjab. The current round of fundraising will help us deepen our penetration in Punjab and expand rapidly into Haryana, Rajasthan and NCT of Delhi with a significant focus on MSME loans.”

A retail-focused franchise both on the liability and lending sides, Capital SFB provides a variety of banking services to its customers through a network of more than 150 branches in Punjab and neighbouring states. It has a diversified loan book comprising agriculture loans, MSME loans, mortgage loans, personal loans and auto loans, with a strong focus on the agriculture and MSME sectors. 

Capital SFB grew its loan book from Rs 1,150 crore in 2015-16 to Rs 3,026 crore as on September 30, 2019. During this period, its deposits grew from Rs 1,810 crore to Rs 4,107 crore. The bank has delivered a current account to savings account (Casa) ratio of about 40 per cent, and gross non-performing assets of 1.3 per cent.