Satin Creditcare raises Rs250 crore in QIP

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Satin Creditcare Network Ltd (SCNL), a Delhi-based micro lender, on Friday said it has raised Rs250 crore by way of a qualified institutional placement (QIP), which opened for subscription on 26 September and closed on 29 September.

Corresponding to Rs250 crore of capital raise, SCNL issued 4,529,970 equity shares to qualified institutional buyers (QIBs) at an issue price of Rs551.88 per equity share, after giving a discount of up to 5% on the floor price of Rs580.92 per equity share, it said in a statement.

On 3 October, SCNL successfully completed the allotment of equity shares to the QIBs. The new shares started trading from 5 October.

“The response to the QIP has been extremely encouraging. We thank our investors for reposing their trust in us,” said H.P. Singh, chairman of SCNL.

A QIP is a sale of securities to institutional investors by a listed company.

The company plans to utilize the net proceeds of the issue towards augmenting its capital base to meet future capital requirements and for funding general corporate expenditure. Religare Capital Markets Limited and Edelweiss Financial Services Limited were the book-running lead managers for the QIP.

SCNL’s business is primarily based on the joint liability group (JLG) model of providing collateral-free microcredit facilities to economically active women in both rural and semi-urban areas, who otherwise have limited access to mainstream financial service providers.

The company also offers loans to individual businesses, micro, small and medium enterprises (MSMEs), product loans for financing purchase of solar lamps and loans for development of water connection and sanitation facilities.

So far, Equitas Small Finance Bank and Capital Small Finance Bank have started banking operations, having earlier been micro lenders. Once the remaining micro finance institutions start banking operations, Bharat Financial Inclusion Ltd (formerly known as SKS Microfinance Ltd) and Satin will be the top entities in the micro finance industry, which will touch the Rs3.3-4.3 trillion mark in the next three to four years, according to a study by ICRA Ltd.

For the quarter ended 30 June, SCNL reported a 72% year-on-year growth in revenue to Rs196.75 crore. Its profit after tax grew 104% to Rs24.60 crore. Its assets under management, at Rs3,278.24 crore, had increased 62% year-on-year, on account of an increase in active client base by 57% to 2.02 million. At the end of the fiscal first quarter, SCNL had 458 branches.

Bharat Financial Inclusion announced last month that it would raise Rs750 crore through the QIP route.