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Incofin, SIDBI Venture to offload investments in Annapurna Finance

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KOLKATA: Belgian investment fund Incofin Investment Management and SIDBI Venture Capital have decided to fully sell their total 12.5 per cent holding in microfinance firm Annapurna Finance for about Rs 90 crore, putting the valuation of Indias eight largest microfinance company at around Rs 850 crore.

Incofin and SIDBI will sell their investments to other existing investors, including Oman India Joint Investment Fund II (OIJIF II), and the deals are likely to happen next month, Annapurna director Dibyajyoti Pattanaik told ET.

Incofin has about 4.13 per cent stake and the sale of the shares will fetch it about Rs 30 crore. SIDBI Venture will receive about Rs 60 crore for its 8.35 per cent, he said.

“We have already partially exited last year. The residual stake will be sold in 2018,” said Aditya Bhandari, Incofins partner & co head for Asia investments.

Incofin invested Rs 13-crore in the microfinance firm in June 2012. Annapurna Finance, which was earlier known as Annapurna Microfinance, got the NBFC-MFI licence from Reserve Bank of India in 2013.

“We invested in the first round of capital expansion. Annapurna has grown strongly since then. Also, ours is a closed ended fund, which is nearing its maturity,” Bhandari said,

adding that it invested in three companies in 2017 and is exploring opportunities in NBFCs in the rural, MSME and impact space.

Annapurna, an MFI with rural focus, has recently raised Rs 155 crore fresh equity from OIJIF, which is backed by State Bank of India and State General Reserve Fund of Oman. The investment helped OIJIF acquire 20.86per cent in the countrys eighth largest MFI in terms of loans outstanding at the end of 2017.

Pattanaik said that OIJIF with a commitment to invest Rs 200 crore in Annapurna would purchase shares from Incofin and SIDBI Venture in the secondary sale.

The latest round of capital infusion is part of Annapurnas plan to raise its net worth to Rs 500 crore and grow the microfinance portfolio along with other asset classes such as SME and housing finance. It has a portfolio of over Rs 2,000 crore at the end of March.

The MFI serves more than 1.2 million borrowers through a network of more than 400 branches across 14 states. Its investors include Small Industries Development Bank of India, Belgian Investment Organization, DCB Bank, Oikocredit, Womens World banking and Bamboo Capital Partners.

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