LeapFrog investments, Aavishkaar infuse $48 mn in Electronica Finance

The fund will pave the way for EFL's expansion, specifically in financing for MSMEs in India's high-growth manufacturing sector

Global investment firm LeapFrog Investments and impact fund manager Aavishkaar Capital have jointly infused $48 million as equity capital in the Electronica Finance Limited (EFL). The investment aims to support Pune-based finance company’s plans for funding MSMEs and rooftop solar projects.

The funds secured would strengthen EFL’s balance sheet and provide the foundation for another phase of rapid expansion. It would be used to increase financing MSMEs in the high-growth potential manufacturing segment in India.

Shilpa Pophale, managing director & CEO, Electronica Finance said besides enhancing capital adequacy, the latest infusion would reduce leverage. Going forward, the aim is to maintain leverage below three times. “The association with two leading social impact investors can help us support small businesses to thrive and deliver resilient, low-carbon growth,” said Pophale.     

The company has grown its assets under management (AUM) by more than three times over the past five years. Its AUM now stands at close to Rs 4,000 crore and is projected to increase with a compound annual growth rate (CAGR) of around 35 per cent over the next three years. 

EFL offers a range of financial products including machine loans, rooftop solar loans, working capital loans, as well as micro loans against property in semi-urban and rural India, to provide sustainable financial inclusion.  

Stewart Langdon, partner, LeapFrog Investments, said funding plays a vital role in financial inclusion and climate resilience for small business owners who have long been overlooked by banks. Anurag Agrawal, partner, Aavishkaar Capital said his company is committed to channel capital to growing, resilient businesses and EFL brings significant opportunity to bolster the MSME market.