ADB to invest $10m in India's Satin Creditcare
The Asian Development Bank (ADB) will invest up to INR667 million ($10.1 million) in Indian microfinance institution (MFI) Satin Creditcare Network.
According to a market filing, ADB will buy about 1.6 million newly issued shares in Satin at INR416.67 each, a premium to the previous day’s closing price of INR387. The purchase will give ADB a 4.3% stake in the company. Satin will issue an additional 659,000 fully convertible warrants to Trishashna Holdings and Investments at INR455.45 each.
Satin was founded in 1990 as a non-banking financial company (NBFC) and registered with the Reserve Bank of India as an MFI in 2013. It claims to be India’s fifth-largest MFI in terms of gross lending portfolio, with INR33 billion in assets under management as of March 2016.
The company has been listed on the Delhi, Ludhiana and Jaipur Stock Exchanges since 1997. It listed on the Bombay, Calcutta and National Stock Exchanges in 2015.
Satin operates in 16 states, with 560 branches and 2.3 million clients across northern India. The MFI has shifted its focus from urban small business owners to rural customers: according to its most recent annual report the majority of its outstanding loans are in agriculture and animal husbandry. The company reported INR5.6 billion in revenue for the year ended March 2016, up from INR3.2 billion the year before. Over the same period profit rose from INR465 million to INR875 million.
Previous PE backers include Lok Capital, which first invested $1.25 million in 2008 and later joined Equator Capital Partners and Danish Microfinance Partners to commit another INR425 million in 2010. Lok exited its stake to MicroVest Capital Management in 2013.
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