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Karvy's NBFC arm eyes Rs200-cr PE funding

Reghu Balakrishnan & Krishna Pophale/Mumbai 06 Dec 12 | 12:31 AM

Karvy Financial Services, non-banking finance company (NBFC) of the Karvy Group, hopes to raise Rs 150-200 crore from PE investors.

Ernst & Young is believed to have been appointed to find suitable ones. Amit Saxena, chief executive officer, confirmed the development but would not disclose financial details. Established in July 2009, Karvy’s NBFC arm sells products such as loans against shares, properties and loans against commodities. It also funds small and medium enterprises and gold loans. The book size is Rs 1,300 crore and the plan is to reach Rs 1,800 crore this financial year. The net profit was Rs 27 crore last year.

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NBFCs are finding the current scenario, with banks tightening lending, a good opportunity to expand. PE entities see NBFCs as an attractive investment target. This calendar year saw 34 PE or venture capital deals in NBFCs, worth $580 million. Since 2009, as many as 162 deals worth $2.4 billion have taken place in Indian NBFCs, according to VCCedge data. This year saw one of the largest, when Warburg Pincus acquired a 43 per cent stake in Future Capital Holdings (now Capital First) from Pantaloon Retail for Rs 470 crore. In October, Warburg increased its stake to 68.4 per cent by investing another Rs 271 crore; its total investment in Capital First is now above Rs 800 crore. Last year, leading PE companies such as the Ashmore Group, Everstone Capital Management and Goldman Sachs had joined hands to launch an NBFC, Indostar Capital.

TOP DEALS IN NBFC                                                     (In $million)
Buyer Target Deal value
Warburg Pincus India Capital First  155.63
International Finance Corp Religare Enterprises  75
Warburg Pincus India, Intl Finance Corp AU Financiers India 50
Creador Capital Fund, Multiples PE Cholamandalam Investment  42.38
NYLIM Jacob Ballas India Fund III Religare Finvest Ltd 37.17

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