Sachin Bansal to be CEO again, buys majority stake in microfinance company

Billionaire Sachin Bansal is returning to an executive role, more than a year after he left e-commerce company Flipkart.

Bansal has picked up a majority stake in Chaitanya Rural Intermediation Development Services (CRIDS), a company which runs microfinance institution Chaitanya India Fin Credit (CIFCPL). He will be CRIDS's new chief executive officer (CEO), said a statement by his communications manager.

Bansal invested Rs 739 crore, roughly $104 million, in CRIDS: Rs 600 as primary infusion and the rest in buying out existing shareholders. His exact stake in the company is undisclosed.

“This acquisition is our entry into financial services,” said Bansal, in a statement. He added that CRIDS founder Anand Rao and co-founder Samit Shetty, will continue to be with the firm and spearhead their existing roles.

“Sachin brings with him the ability of building huge scale grounds up to CRIDS,” said Shetty.

CRIDS, which started in 2009, focuses on low-income borrowers for vehicle finance, housing loans, small business loans and education loans. It has 176 branches across 32 districts, and a total of 1,582 employees, according to the company’s latest annual report.

In FY19, it disbursed loans around Rs 800 crore in loans and had total assets under-management of Rs 567 crore. In the last fiscal, the company’s loan book grew by 61 per cent, with an active customer base growth of 32 per cent and a growth in average loan outstanding per client of 22%. Its net profit was Rs 7.25 crore, up from Rs 4.66 crore the year before.

Bansal is a co-founder of Flipkart, India’s most valued start-up, but sold his shares for $1 billion when Walmart took over the company. Little has been disclosed about his plans for CRIDS, a 10-year-old lender which focuses on rural, low-income customers in Karnataka, Bihar, Maharashtra, Jharkhand and Uttar Pradesh.

Bansal has dabbled in start-ups after leaving Flipkart. He has made debt investments in a variety of ventures like Vogo, Bounce, and Kissht and financing firms Altica Capital and Indostar Capital Finance. Some of these investments are from BACQ, a venture started last year with his IIT-Delhi batch mate, Ankit Agarwal.

Bansal’s biggest bet is Ola, where he committed to invest $100 million in January. A source close to the deal said the equity investment is around $25 million, while the rest is structured debt. Ather Energy, the electric scooter start-up, is another substantial investment where he has put in close to $35 million. He has over a dozen angel investment from his time at Flipkart and beyond.

Bansal’s bet in on CRIDS comes in the backdrop of the rise of specialised lenders and mobile payment companies. According to Boston Consulting Group, more than 1,000 fintechs have come up in India the last seven years.