Eight Roads backs India's IFMR Capital

The investment provides a partial exit for IFMR's existing backer LeapFrog Investments, which committed $29 million to the company in 2014. IFMR will use the new capital to grow its existing business while expanding into new sectors and introducing new financial products, according to Livemint.

Founded in 2008, IFMR connects lenders in existing and emerging debt capital markets to other Indian NBFCs that operate across various industries, including microfinance, agriculture, housing and vehicle finance. The company promotes itself on the grounds that its experience and understanding of these sectors can help to mitigate the risk of debt investors wary of supporting such specialized NBFCs.

Currently IFMR has about INR300 billion ($4.5 billion) in loans on its books, to more than 100 NBFCs. It claimed revenue of INR2.5 billion last year with a profit of INR600 million.

NBFCs are becoming increasingly important to India's financial system, as the country's rapid growth leads banks to focus on lending to larger companies and small and medium-sized enterprises face a shortage of credit opportunities. The government has also promoted these institutions as a way for India's unbanked population to enter the financial system.

A number of PE firms have invested in the industry as well. UK-based development finance institution CDC Group committed INR10 billion earlier this year to India Infoline Finance, seeing NBFCs as a way to further its development goals for the country. Other significant recent investments include a INR10 billion funding round in September for Hero FinCorp led by ChrysCapital, with participation by Credit Suisse and its parent, the Hero Group.

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• Topics
• South Asia
• Financials
• Expansion
• Trade sale
• India
• Eight Roads
• NBFCs
• LeapFrog Investments
• Exit