Small finance bank licensee Janalakshmi raises $150 mn in round led by TPG

Mumbai: Small finance bank licensee Janalakshmi Financial Services Ltd on Monday said it has raised $150 million (Rs.1,000 crore) in a round of primary funding led by global private equity firm TPG.

Apart from the primary fund raising, existing investors also sold some of their stakes worth $60 million (Rs.400 crore), the firm said.

TPG’s investment adds to the 2014 investment it made in Janalakshmi. Existing investors, including an investment fund managed by Morgan Stanley Private Equity Asia, Havells India, and Vallabh Bhansali also participated in the round alongside new investors.

Janalakshmi will use the funds to drive customer acquisition and build on current product offerings, such as the company’s new monthly savings programme, a company statement said.

“This latest round of capital will fuel further expansion of the products and services we offer and bring them to more families, businesses, and individuals,” said Ramesh Ramanathan, promoter and chairman of Janalakshmi.

Last September, Janalakshmi received in-principle approval from the Reserve Bank of India (RBI) to convert to a small finance bank. The current round of equity will help Janalakshmi transition to a bank structure and comply with the RBI’s rules for conversion to a small finance bank.

Starting in 2006 as a for-profit institution focused on improving the lives of the urban poor, Janalakshmi is now represented in more than 184 cities across 19 states and has assets under management of approximately $1.65 billion (Rs.10,500 crore).

“In India, there is a tremendous opportunity to fill the gap between what is being offered by traditional banks and what the nation’s growing population needs. Janalakshmi is a pioneer of microfinance and is at the forefront of addressing this opportunity in a meaningful way,” said Puneet Bhatia, partner and country head of India for TPG.

In India, TPG has partnered with financial services companies, including Shriram Capital, Shriram City Union Finance, Shriram Transport Finance.