Mumbai: Indian School Finance Co. Pvt. Ltd (ISFC), which lends to companies in the education sector, is looking to raise around $30-35 million (approximately Rs200-230 crore) from private equity investors, said two people aware of the development.
ISFC, a non-banking financial services company (NBFC), founded in 2008, lends to schools and education institutions.
It lends to private schools, affordable schools, vocational institutes and coaching classes to help them build their infrastructure such as setting up of computer and science labs, construction of additional floors or wings in existing premises or for implementing teaching delivery methodologies such as digital classrooms.
“ISFC has appointed Deloitte to advise them on their latest fundraising plans and they have started reaching out to investors. They are looking to raise around $30-35 million in this round,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.
The latest fundraising round will comprise a primary and a secondary share component, said the second person cited above, also requesting anonymity.
“The existing investors of IFSC are likely to sell part of their stakes in this round. The primary capital will be used to expand the company’s loan book,” said the second person.
IFSC counts impact investors Grey Matters Capital and Caspian Impact Advisors as its investors.
In October 2016, IFSC raised $6 million from Grey Matters Capital.
“We are in process of fundraising and have appointed Deloitte for the same, we will share the relevant details at appropriate time,” Neeraj Sharma, chief executive officer and managing director of ISFC, said in an email response to questions on the company’s fundraising plans.
According to filings with the registrar of companies (RoC), ISFC’s gross loan portfolio stood at Rs285.26 crore as of 31 March 2017, with gross non-performing assets (NPA) of Rs4.14 crore. The company reported a profit of Rs4.56 crore in 2016-17.
ISFC has presence in 13 states, with offices in cities such as Hyderabad, Jaipur, Bengaluru, New Delhi, Pune, Nagpur and Trichy.
Financing education institutions, though a niche sector in the NBFC space, has seen traction lately with investors, with several companies raising funds or out in the market to raise funds.
Thirumeni Finance, an NBFC that operates under the name Varthana and lends to affordable private schools, is in the market to raise about $50 million.
In April 2016, Varthana had raised Rs93 crore ($14 million) in Series B round of financing from Kaizen Private Equity and Zephyr Peacock India, along with existing investors Elevar Equity, LGT Venture Philanthropy and Omidyar Network.
In its series A round, Varthana had raised Rs32 crore from leading investors including former Credit Suisse banker Vikram Gandhi and Genpact founder Pramod Bhasin in 2015.
that Shiksha Finance, an NBFC focusing on school and student loans, raised $2.5 million (Rs16 crore) through a mix of debt and equity from Michael & Susan Dell Foundation (MSDF).
Incorporated in 2014 by V.L. Ramakrishnan and Jacob Abraham, Shiksha provides loans to schools to help develop infrastructure and loans for students to help families from lower-income groups finance education of their children.