Warburg Pincus poised to commit $50m to Indian NBFC

A senior official at the private equity firm told LiveMint that the offer is attractive and will enable capital to be returned to investors. Au Financiers will also use the funding to support geographical expansion and a planned move into the housing finance market.

Founded in 1996, the Jaipur-based company is majority-owned by private equity investors. Motilal Oswal committed INR200 million ($4 million) in the first round of funding in 2008. It also participated in a second round in 2010, injecting INR600 million with the International Finance Corp. and other backers. It was reported earlier in February that The Carlyle Group and Warburg Pincus were in talks about further funding.

Au Financiers offers commercial vehicle and car loans, small- and medium-sized enterprise (SME) loans, and loans against property. It has 141 branches and principally operates in semi-urban and rural areas. Revenue and net profit rose more than three-fold in the 2011 fiscal year to INR1.59 billion and INR420 million, respectively.

The NBFC space is popular among private equity investors, largely for the flexible, rupee-denominated financing options they provide to entrepreneurs who aren't necessarily comfortable selling equity stakes.

KKR set up its own NBFC in 2009, while Goldman Sachs Private Equity, Ashmore Group and Everstone Capital teamed up to create Indostar Capital Finance. It has also been reported that Apollo Global Management and ICICI Venture will launch a joint venture NBFC that will specialize in mezzanine financing, lending money for asset purchases through a combination of debt and equity components.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Financials
• Exits
• Expansion
• South Asia
• Warburg Pincus Asia
• Financial Services
• India
• NBFCs