TPG leads $150m round for India's Janalakshmi

Participants in the round include existing investors Morgan Stanley Private Equity Asia and Havells India, along with unnamed new investors. The funding round will be accompanied by secondary transactions totaling $60 million, providing partial exits to existing investors, according to a release.

Janalakshmi's main business is providing small batch loans to joint lending groups; it also lends to selected individuals with good credit history, as well as micro, small and medium-sized enterprises. It is present in 184 cities in 19 states, and claims to have about $1.65 billion in assets under management. The new capital will be used to expand the company's products and services, and to grow its customer base.

The company is also pursuing regulatory approval to open a small finance bank, after gaining in-principle approval from the Reserve Bank of India in 2015. Janalakshmi raised INR3.3 billion from CDC Group in January in order to meet the associated tier-two capital requirements.

This is TPG's second investment in Janalakshmi; the firm also participated in a 2014 round for INR6.1 billion ($92 million), along with Mizuho Securities and Tata Capital. Since its founding in 2005, Janalakshmi has raised multiple rounds of funding, including a INR3.25 billion round in 2013 led by Morgan Stanley and a 2012 round worth INR1.45 billion led by CVCI.

"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," said Puneet Bhatia, partner and country head for India at TPG. "Janalakshmi is a pioneer of microfinance and is at the forefront of addressing this opportunity in a meaningful way. We look forward to our continued partnership with the company and to helping more Indians gain access to financial services."

TPG is investing out of its third global middle market and growth equity fund, which it closed at $3 billion in 2015. The fund covers a broad range of industries, with particular focus on large emerging market such as China and India. Co-founder Jim Coulter recently told Bloomberg that TPG's "single focus" is on India, where the firm plans to invest up to $3 billion in distressed assets over the next three years.

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• Topics
• South Asia
• Financials
• Expansion
• Growth
• India
• TPG Capital
• Growth capital